The Cyprus Parliament on 19 June 2020 has voted the Cyprus
transposition of the European Union (EU) Anti-Tax Avoidance
Directive (ATAD) for Exit taxation and Hybrid mismatch rules, which
essentially completes Cyprus' transposition of the EU ATADs
i.e. ATAD I and II that were adopted by the EU in 2016 and 2017
respectively.
The new law mainly addresses Exit Taxation with the sole purpose
to prevent companies from avoiding tax in the event of re-location
of assets.
Our Views
While the EU Anti-Tax Avoidance Directive aims to ensure that
member states take a coordinated stance against tax avoidance, it
is worth to note that those targeted are Companies operating across
international borders. In view of this, most of Cyprus firms have
the activity of a holding company, which are tax exempt in Cyprus
and with limited transactions, therefore the impact may not be that
large in terms of exit taxation. We believe that the new law shall
affect Companies in structures with
