The Cyprus Tax Department has published Interpretative Circular No. 55 of 10 November 2021, which clarifies the administrative fines for failing to comply with DAC6 reporting requirements. Under the Cyprus Law on Administrative Cooperation in the Field of Taxation, the administrative fines for failing to comply with DAC6 obligations include:

• Failure to submit information on a reportable arrangements - EUR 10,000 to 20,000
• Delay in submitting information on a reportable arrangement:
  • delay up to 90 days - EUR 1,000 to 5,000
  • delay exceeding 90 days - EUR 5,000 to 20,000
• Failure to submit or delay in submitting notification on waiver (exemption) from the obligation to submit information on a reportable arrangement - same fines as above for failing to submit or delay in submitting information;
• Submission of incomplete or false information regarding a reportable arrangement - EUR 1,000 to 10,000
• Failure to submit data, documents, and information requested by the competent authority within the prescribed deadline (within 14 days) - EUR 1,000 to 10,000
• Failure to pay the above fines or continued violations - up to an additional EUR 20,000

Interpretative Circular No. 55 provides the following clarifications on the fines for DAC6 reporting:

• An annual administrative fine cap of EUR 120,000 applies per intermediary/relevant taxpayer, although this cap does not apply in cases of willful default or fraud;
• Fines may be reduced by up to 50% if reporting violations for a particular year are corrected by the tax return deadline of the intermediary/relevant taxpayer for the particular year, although this does not reduce the annual administrative fine cap;
• In the event that an intermediary/relevant taxpayer has applied an incorrect interpretation of the law on multiple arrangements, multiple fines will not be imposed as long as the interpretation was reasonable and resulted from insufficient guidance, although this relief does not apply in cases of willful default or fraud; and
• Fines may be imposed for failing to keep relevant books and records for reportable arrangements for at least 6 years from the end of the relevant tax year, which is increased to 12 years in cases of willful default or fraud.

In addition to publishing Interpretative Circular No. 55, the Cyprus Tax Department has also issued the following notice announcing a further extension of relief from administrative fines for DAC6 reporting to 31 January 2022 in certain cases. The relief has been extended multiple times and was previously provided until 30 November 2021.

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DAC6 –Directive of the Council of EU on mandatory disclosure and exchange of information on cross-border arrangements

Extension to the imposition of administrative fines for overdue submission of information

The Tax Department informs that there will be no imposition of administrative fines for overdue submission of DAC6 information that will be submitted until the 31th January 2022, in the following cases:

(a) Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021.

(b) Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 and had to be submitted by 31 January 2021.

(c) Reportable cross-border arrangements made between 1 January 2021 and 1 January 2022, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occurred first.

(d) Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advice, between 1 January 2021 and 1 January 2022 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advice.

(e) The periodic reports for marketable arrangements.