Cyprus provides consent to OECD Pillar 2 Safe Harbour rules

Ministry of Finance of the Republic of Cyprus has published a press release stating that Cyprus provided consent under OECD Inclusive Framework on BEPS to the Pillar 2 safe harbour rules.

The press release states that Article 32 of the Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union, also known as Pillar 2, provides that all European Union (EU) member states must have given consent in order for an international set of rules and conditions to be a qualifying international agreement on safe harbours.

In view of Article 32 of the Pillar 2 Directive, the Republic of Cyprus hereby provides its full assurance and consent to the safe harbour rules as provided in the following documents:

a) OECD (2022), Safe Harbours and Penalty Relief: Global Anti-Base Erosion Rules (Pillar Two), OECD/G20 Inclusive Framework on BEPS, OECD, Paris, published by the OECD on 20 December 2022,

b) OECD (2023), Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), July 2023, OECD/G20 Inclusive Framework on BEPS, OECD, Paris, published by the OECD on 17 July 2023,

c) OECD (2023), Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), December 2023, OECD/G20 Inclusive Framework on BEPS, OECD, Paris, published by the OECD on 18 December 2023,

d) OECD (2024) Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), June 2024, OECD/G20 Inclusive Framework on BEPS, OECD, Paris, published by the OECD on 17 June 2024.

While Cyprus is not a member of the Organisation for Economic Co-operation and Development (OECD), it has been supportive of the OECD/G20 and the Inclusive Framework on BEPS in the international tax field. Cyprus has not yet completed its implementation of the Pillar 2 global minimum tax as required by Council Directive (EU) 2022/2523 and transposition of the EU Directive locally is expected in Autumn 2024, with effect from the beginning  of 2024 for the QIIR and from the beginning of 2025 for the QUTPR and for the Cyprus DMTT.

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Source: Ministry of Finance of the Republic of Cyprus