Cyprus: Tax Treaties

The Cyprus Tax Department has issued new guidance strengthening due diligence requirements for financial institutions under DAC2/CRS, specifically targeting potential misuse of Citizenship by Investment and Residence by Investment schemes. Financial institutions must now implement enhanced verification procedures to ensure accurate reporting of account holders' tax residency, with immediate application to new clients and a six-month compliance window for existing accounts.

On 31 December 2025, Cyprus published in the Official Gazette a comprehensive package of tax reform legislation approved by the House of Representatives earlier that month.

As multinational companies face increasingly complex tax rules, economic substance requirements, and cross-border employment challenges, advisory firms are adopting digital twin models...