All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Cyprus: Cyprus amends registration requirement on trusts

damianou.jpg

Chris Damianou, Eurofast Taxand

The Republic of Cyprus, following its commitment to initialise rules to prevent and identify money laundering, has introduced an amendment to the requirement of registration of trusts. In particular, until now trusts had no obligation to be registered in any national record. On September 9 2013, the Official Gazette of Cyprus published the new legislation, according to which amendments on trusts were approved.

Persons providing services of management and administration to trusts are obliged to verify the details and the true identity of the beneficial owners of trusts, including the following categories:

  • Trustees;

  • Settlors;

  • Beneficiaries or class of beneficiaries;

  • Protectors, if any;

  • Investment consultants, accountants, tax consultants, if any;

  • Activities of the trust; and

  • Any other person that exercises the effective control on the trust.

This information needs to be kept in the Republic of Cyprus and the persons providing such services must be ready at all times to provide them to the competent authority, when requested.

Certain information on trusts, for as long as they are governed by Cyprus Law, will be kept in the trust registries. The trust registries will be kept by three Cyprus regulatory authorities: the Cyprus Securities and Exchange Commission, which regulates amongst others the service providers, the Cyprus Bar Association, that regulates law practitioners and the Cyprus Association of Certified Accountants. The competent authorities that keep the trust registries can exchange information as part of their obligations under the legislation and the Anti-Money Laundering legislation. The new amendments on the legislation clarify that such information will not be made available for the public.

Trust information delivered to the competent authorities shall include:

  • Name of trust;

  • Names and addresses of every trustee, according to all relevant time;

  • Date of creation of the trust;

  • Date of any changes of the law governing the trust; and

  • Date of termination of the trust.

The information must be provided to the competent authorities within 15 days of creation of the trust or from the date when the trust is governed by Cyprus Law. Any changes to the name of the trust or the details of the trustee as point two must be notified within 15 days from that change. In case of termination of the trust, or change of governing law, the competent authority must be notified within 15 days and the competent authority shall be obliged to keep information of the trust for the next five years.

In regards to trusts that are already in force and under Cyprus Law, trustees that are Cyprus residents have to notify the competent authority of the above mentioned information within six months.

Eurofast's take

The changes have been welcomed in Cyprus. They are considered as a positive step towards tackling anti-money laundering and proof that Cyprus is committed to its obligations under the agreement with Troika. The amendments do not remove the level of confidentiality as is the standard and at the same time it will be a great tool in evaluating the attractiveness of trusts in Cyprus.

Mild concerns have been expressed, though, on the administration cost that will arise from such obligations by the service providers for such Trusts. However it is believed that the changes will be a step forward for Cyprus as a jurisdiction. The information provided to the competent authorities will not reveal confidential information and will also achieve the monitoring of trusts.

Chris Damianou (chris.damianou@eurofast.eu)

Eurofast Taxand, Cyprus

Tel: +357 22 699 222

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

This week Brazil’s former President Luiz Inacio Lula da Silva came out in support of uniting Brazil’s consumption taxes into one VAT regime, while the US Senate approved a corporate minimum tax rate.
The Dutch TP decree marks a turn in the Netherlands as the country aligns its tax policies with OECD standards over claims it is a tax haven.
Gorka Echevarria talks to reporter Siqalane Taho about how inflation, e-invoicing and technology are affecting the laser printing firm in a post-COVID world.
Tax directors have called on companies to better secure their data as they generate ever-increasing amounts of information due to greater government scrutiny.
Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
ITR is delighted to reveal all the shortlisted firms, teams, and practitioners for the 2022 Americas Tax Awards – winners to be announced on September 22
‘Care’ is the operative word as HMRC seeks to clamp down on transfer pricing breaches next year.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree