The Cyprus Tax Department updates due diligence procedures for financial institutions regarding citizenship and residency by investment programs under CRS, effective immediately for new clients and within six months for existing clients.
The Tax Department of the Republic of Cyprus has announced enhancements to the due diligence procedures for Cypriot Financial Institutions (CFIs) under the Common Reporting Standard (CRS), developed by the OECD.
These measures address the potential misuse of Citizenship by Investment (CBI) and Residency by Investment (RBI) programs to conceal true tax residence and assets abroad, which could undermine CRS reporting obligations.
CFIs must now verify whether account holders or controlling persons have obtained residence rights through CBI/RBI programs and whether they have other residences or have spent more than 90 days in other jurisdictions. They should also inquire about tax filings in these jurisdictions.
The new procedures apply to all new clients immediately. For existing clients, the procedures must be completed within six months if the client claims a high-risk jurisdiction under CBI/RBI programs. CFIs are instructed to inform the Tax Department via email at dac2@tax.mof.gov.cy with the subject “CBI/RBI-CRS” if they submit corrected or new CRS reports related to existing clients.
Further information is available on the OECD website at OECD Residence, Citizenship by Investment FAQs.
