SUPERVISORY authorities have recommended that companies’ compliance officers work directly with the Inland Revenue Department (IRD) to answer global tax authorities’ queries, in response to a damning report on the island’s tax transparency and information exchange record.
The Global Forum on Transparency and Exchange of Information for Tax Purposes recently said Cyprus was considered non-compliant in ensuring reliable accounting records were kept and enabling authorities to gather information via exchange of information requests. It also said Cyprus and four other countries fell short of the international standards on tax transparency.
“It has been decided to take concrete measures,” the authorities’ joint news release said of the report.
Companies providing administrative services will need to appoint a liaison officer to communicate with the IRD in relation “to responding and receiving information” in relation to global tax authorities’ queries. The supervisors, the Securities and Exchange Commission, the Cyprus Bar Association, the institute of certified public accountants (ICPAC) and the IRD, will treat as liaisons the companies’ compliance officers unless told otherwise by the end of the month.
Any authorities failing to respond to tax information requests may be penalised, the statement said.
In addition to appointing liaison officers, the IRD will update the tax register and the supervising authorities plan to announce workshops and seminars available to their members over the next two months.
If measures fail to create an early compliance culture, the government might “significantly increase administrative penalties on non-compliant companies and their directors… an action that will have the full and effective support of all supervising authorities,” the news release said.