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  • Miranda Pambori

The provisions of the Companies Law CAP. 113 and specifically Articles 354A to 354IH of CAP 113, allow for foreign companies which are incorporated and currently operating in a different jurisdiction to transfer their seat to the Republic of Cyprus and at the same time companies established in the Republic of Cyprus to relocate their seat abroad.


Scope

Redomiciliation applies both to Cypriot and foreign companies which wish to relocate in a different jurisdiction, provided that the company’s Memorandum and Articles of Association (the ‘‘M&AoA’’) provide for re-domiciliation. For foreign companies which wish to re-domicile in the Republic of Cyprus, the jurisdiction in which they are currently registered or incorporated must also provide for and not prohibit Redomiciliation. If both their current jurisdiction and the M&AoA allow it, the relevant application forms must be filed to the Companies Registrar (the ‘‘Registrar’’, the ‘‘RoC’’).


Eligibility

Any foreign company, whose jurisdiction of incorporation and M&AoA allow it can redomicile in the Republic of Cyprus unless it is in the process of insolvency or winding up or if Court proceedings have been initiated. Such foreign company is restrained from transferring its seat to the Republic of Cyprus.


Required Documentation and Evidence – Accompanying the Application

The relevant forms must be duly submitted in the ROC along with the relevant documentation, duly apostilled, containing at least the following: -

1. A resolution by the Shareholders permitting the foreign company to be re-domiciled and registered as a continued legal body in the Republic of Cyprus.

2. Notification letter to the Commercial Register of the country of incorporation informing about its intention to re-domicile,

3. Certificate of good standing, issued by the appropriate foreign authority

4. The new M&AoA of the company, in accordance with Cypriot law

An affidavit by the Director of the foreign company, confirming the information and details of the company and also that no criminal or administrative procedures have been commenced against the foreign company for infringement of any laws in its country of incorporation, currently and for the following 6 months

5. An affidavit from a Director of the foreign company confirming the financial good standing and solvency of the foreign company and that they are not aware of any facts that may negatively affect the solvency of the company within the period of 12 months from the date of the said application

6. A list of the Directors and Secretary and/or the managers of the foreign company – as applicable

7. A list of the Shareholders / members of the foreign company


For public foreign companies, in addition to the documents above that apply for private foreign companies, the following documents must also be submitted to the RoC:

1. The most recent invitation if the foreign company has offered via invitation its shares or bonds to the public

2. If the foreign company is a company with its shares listed at a recognised stock exchange, a copy of the consent by the relevant authorities of the stock exchange where the shares are listed to continue its existence in the Republic of Cyprus.

3. Duly certified register of the existing members of the foreign company


Note: (1) The above as well as other such documents as the RoC may deem necessary so as to be satisfied that (i) the foreign jurisdiction of incorporation permits the re-domiciliation of the company and that (ii) the consent for the re-domiciliation has been granted by such number of members, employees and/or creditors as required by the laws of the country of incorporation of the foreign company, might be requested.

(2) Any foreign company which will undertake any activity which a licence is required in Cyprus, must obtain such license according to the requirements of Cyprus Law.

(3) All documents accompanying the application must be duly certified and apostilled.

Liabilities

False declarations or representations by any of the officials within the management body of a company, constitute a criminal offence and in case of conviction, imprisonment of 1 year and a fine up to the amount of €34,172 may be imposed.


Procedure

Provided the relevant documentation and evidence required to accompany the application are collected, the procedure is fairly forward and fast. The application along with the required documentation are submitted to the RoC.


(1) Temporary Registration

Following the application and provided the RoC is satisfied, it will issue a Temporary Certificate of Continuation of the foreign company in the Republic of Cyprus. This temporary certificate states that the company is temporarily registered as a continuing entity in the Republic of Cyprus as from the date of such registration. The Certificate is issued and published to the Official Gazette of the Republic of Cyprus. The foreign company must then within 6 months, provide evidence to the RoC proving that it has been deleted from the Register of the jurisdiction of incorporation. To do so, the below are essential:

i. Supporting Documents from the regulator of the jurisdiction of incorporation that the Foreign Company has ceased being registered (the “Certificate of Discontinuance”).

ii. Temporary Certificate of Continuation in the Republic of Cyprus.


Note: (1) Any application requesting the deletion from the registrar of the jurisdiction of incorporation, must only be submitted once the Temporary Certificate is issued in by the Registrar in the Republic of Cyprus.

(2) Any supporting documents accompanying the application must be officially translated in Greek and in English where necessary and duly certified and apostilled.


If the name of the foreign company is according to the opinion of the Cyprus Registrar confusing or misleading in relation to any other name already registered, the Registrar will request the amendment of the name before registration (a relevant application for name approval will be filed).

(2) Final Approval

Upon the issuance of the Certificate of Discontinuance and once presented at the RoC, the RoC will issue the final Certificate of Continuation, certifying that the company ceased to be a company registered in the country of initial incorporation and has been duly registered in the Republic Cyprus as a continuing entity in accordance with the provisions of the Companies Law, CAP 113.


Issuance of the Certificate of Continuation

The issuance of the Certificate of Continuation marks the end of this procedure and the company is certified as a company duly registered in the Republic of Cyprus.



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  • Miranda Pambori

The EU introduced a Directive on mandatory disclosure rules aimed at increasing transparency to detect potentially aggressive cross-border tax planning.


Following the adoption of Council Directive (EU) 2018/822 (amending Directive 2011/16/) on the mandatory automatic exchange of Information in the field of taxation in relation to reportable cross-border arrangements (referred to as DAC6 or the Directive), the Republic of Cyprus transposed the EU Directive into domestic law, on 31 March 2021.

Law (L. 41(Ι)/2021, the Law) amending the Law on Administrative Cooperation in the field of Taxation (Law N. 205(I)/2012) was published in the Official Gazette of the Cyprus Republic and entered into force. It is important to note that even though the Law entered into effect as of 1 January 2021, it has retroactive application, being in force as of 25 June 2018.


The aim of the Directive is enabling the EU to prevent harmful tax practises and to close loopholes by enacting legislation or by undertaking adequate risk assessments and carrying out tax audits collectively within its Member-States.


Disclosure of Cross-Border Tax Arrangements

The disclosure applies to any individual, partnership, company or legal entity, operating in the EU or with interest in the EU.

The disclosure is also extended to multinational companies, intermediaries such as law firms, accountants, banks and financial advisors.

DAC6 requires EU intermediaries and taxpayers to submit all relevant information to the Tax Authorities, in relation to cross-border arrangements that meet at least one of the ‘’hallmarks’’ as defined within the Directive.

The retroactive application of the Law, implies that intermediaries and taxpayers must review the necessary information in relation to reportable cross-border arrangements concluded on or after 25 June 2018 provided that one of the prerequisite triggering events is met, to ensure fulfilment with their reporting obligations.


Requirements for Reportable Arrangements

· Cross Border

· One or more of the Hallmarks A-E as listed in Annex IV of the Directive and the Main Benefit Test («MBT»), where applicable

What is a 'Reportable Cross-Border Arrangement' («RCBA») ?

Under Directive (EU) 2018/822, a reportable cross-border arrangement (RCBA) refers to any cross-border tax planning arrangement (concerning two or more EU member states or one EU member state and a third country), which bears one or more of the hallmarks listed in the Directive and concerns at least one EU Member State. The definition of RCBA, included in Article 2 of the Law is aligned with the DAC6 definition.


"Marketable arrangements," are defined in both DAC6 and the Law as "cross-border arrangements that are designed, marketed, ready for implementation or made available for implementation without a need to be substantially customised."

The hallmarks – are features of the arrangement indicating potential tax avoidance. Hallmarks can be divided into those which are subject to the MBT, and those which by themselves trigger a reporting obligation without being subject to the MBT.

Features regarding the automatic exchange of information and beneficial ownership are not subject to the MBT, i.e. in cases where it can be established what the main benefit or one of the main benefits which a person can reasonably expect to derive from the arrangement is.


(One of) the following conditions must be met:

  • Not all of the participants are tax residents in the same jurisdiction.

  • Any of the participants holds a dual tax residency.

  • Any of the participants carries on business in another jurisdiction via a permanent establishment (domestic arrangements are not expressly included).

  • Any of the participants carries on business in another jurisdiction without a permanent establishment

  • The transaction could potentially impact the automatic exchange of information or the identification of beneficial ownership.

‘’EU Nexus’’ Main Benefit Test (MBT)

Under DAC 6, this is satisfied if it can be established that the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement, is the obtaining of a tax advantage.


Reporting Obligations

The reporting obligations primarily lies with intermediaries. The DAC 6 Law envisages two distinct types of intermediaries. Primary Intermediaries and Secondary Intermediaries.

The concept of intermediary in not limited to tax experts but may include inter alia lawyers, domiciliation companies, consultants, accountants, banks, insurance companies, management companies or investment managers if they qualify as intermediaries within the meaning of the DAC 6 Law.


Intermediaries should only be exempt from their reporting obligations to the extent they can evidence that the same arrangement has already been reported by another intermediary.


Who is an intermediary / secondary intermediary ?

Intermediary

Intermediaries are broadly defined in Article 3(21) DAC 6 as follows: ‘any person that designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement’. The same definition is adopted within the Law and subsequent Regulations (Κ.Δ.Π. 438/2020) as well.

Under the Directive, intermediaries with EU nexus have the primary obligation to file information with the tax authorities. DAC6 provides for an exemption from reporting for intermediaries and relevant taxpayers, if sufficient proof of reporting of the same information is provided by the other intermediary/relevant taxpayer, as well as an exemption from reporting for intermediaries covered under legal professional privilege (LPP). If there are no other qualifying intermediaries (i.e., EU-nexus intermediaries or intermediaries not covered under LPP), the obligation will be shifted to the relevant taxpayer(s).


Secondary intermediary

Secondary intermediaries are persons (individuals or companies) who provide aid, assistance or advice in relation to the designing, marketing, organizing or implementation of reportable cross-border arrangements, or know, or could reasonably be expected to know, that they have undertaken to provide such aid, assistance or advice. The same definition is adopted within the Law and subsequent Regulations (Κ.Δ.Π. 438/2020) as well.

Note: Opinions regarding whether an arrangement and/or transaction is reportable, does not on its own, create the responsibility to disclose any information. The requirements of an intermediary as defined above, are not met. For such opinion to create disclosure responsibility, it is presumed that the person know or could reasonably be expected to know that he or she have undertaken to provide aid, advice or assistance.

If however, consulting services are provided, including ways to better structure the transaction, this could make the said person to be regarded an intermediary.


Filling Process

Information on RCBA is filled with the CTA through the Government getaway Portal «Ariadni».


Intermediaries and taxpayers are able to register in Ariadni and upon validation, information can be submitted by uploading an XML file. Detailed help and support on how to register and/or upload the relevant information, is found on the CTA website.


Legal Professional Privilege (LPP)

Practicing lawyers are excluded from the obligation to file information to the CTA, where such information fall within the scope of ‘legal professional privilege’.

They must, however, provide within 10 days, any other intermediary involves in the RCBA, or where there is no other intermediary involved, the relevant taxpayer of their reporting obligation. The reporting obligation is shifted to the taxpayer except where the taxpayer explicitly waives its right of confidentiality.


Right to ask for information

The competent authority may require with written notice to receive within 14 days information from the intermediary or the tax payer, so as to ensure compliance with the provisions of the legislation.


Administrative Fines

Non-compliance with the above disclosure requirements, could result in penalties as high as €20.000 per arrangement, depending on the infringement.


Intermediaries as well as taxpayers engaging in cross-border arrangements should take action and review their procedures and practises to ensure compliance with the new obligations under DAC6 legislation. Following the new disclosure regime applicable, intermediaries and taxpayers must engage in continuously monitoring their disclosure obligations so as to avoid any infringement and penalties, as well as reputational damage.


Extension for Submission of Information

Considering the complexity and uncertainty that remains in the area, as well as delays caused due to the COVID-19 pandemic, the CTA has issued further guidance and clarifications, as well as extending the deadline for compliance – before any administrative fines are issued to those who do not meet the disclosure criteria. The latest extension for overdue submission as published by the Tax Department is until the 30th January 2022, and applies in the following cases:

  1. Reportable cross-border arrangements that have been made between 25 June 2018 and 30 June 2020 and had to be submitted by 28 February 2021.

  2. Reportable cross-border arrangements that had been made between 1 July 2020 and 31 December 2020 and hat to be submitted by 31 January 2021.

  3. Reportable cross-border arrangements made between 1 January 2021 and 31 August 2021, that had to be submitted within 30 days from the date they were made available for implementation or were ready for implementation or the first step in the implementation has been made, whichever occurred first.

  4. Reportable cross-border arrangements for which secondary intermediaries provided aid, assistance or advise, between 1 January 2021 and 31 August 2021 and had to submit information within 30 days beginning on the day after they provided aid, assistance or advise.

  5. Periodic reports for marketable arrangements.




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  • Miranda Pambori

The following article provides a brief introduction to the notion of ‘crime as a social construct’ and a short overview of the concepts of deviance, moral panics and the role of media in creating, shaping and reinforcing behavioural standards.


What is deemed criminal can change though the years; for example marital rape was not an offence until 1991[1] and euthanasia is an offence to most countries including the UK, but not in Switzerland. Thus, one can argue that crime is not the object, but rather the product of criminal policy[2].


Deviance can simply be described as a state of diverging from usual or accepted standards. According to Sutherland, deviance is less a personal choice and more a result of differential socialization processes and, whether an act is deemed deviant depends not on the nature of the act but rather how people react to it, thus a deviant act is largely affected by the society it takes place in.


The ‘social construction of reality’[3] Labelling is the process of classifying kinds of people in a social order. Social groups and authorities create deviance by first making the rules and then applying them to people who are thereby labelled as outsiders[4]. Therefore crime does not exist[5], ‘it is the product of interaction and negotiation between’[6]individuals and the society, and thus a social construction. Individuals are judged by rules they have no hand in making.


Therefore: ‘who creates the social norms and what is deviant?’ The power elite[7] who according to Mills, is a small group of wealthy and influential people at the top of (each) society who hold the power and resources. Similarly Becker[8] referred to moral entrepreneurs; the individuals or groups who publicize and problematize “wrongdoing”, having the power to create and enforce rules to penalize wrong-doing. Politicians, the Media and people at the top of the hierarchal ladder of authority help create moral panic then allow it to diffuse[9], as a way of gaining control over people.


Moral panic is created by spreading fear in the name of security and stability. A good example is the increased attention and coverage on the said Immigration Crisis within and across Europe and the European Union and the negative consequences as a result on the Member States directly affected by such matters. Such coverage cultivates and continually nurtures feelings of prejudice, resentment, reservation and even hatred in extreme cases among the nationals of Host Member States against immigrants, therefore allowing for stricter immigration control and laws that weaken and infringe Human Rights. Young argues the media ‘amplifies such acts until there is a translation of stereotypes into actuality, of fantasy into reality’ – thus media can largely be blamed for the increase of fear and even crime or criminal behaviour in extreme cases.


Contrary to the above, McRobbie and Thornton[10] argue moral panics have less impact in today’s modern world as societies are used to 'shock, horror stories’. This could be partly true in relation to the form that moral panics have today, but not necessarily to their effect. Even though societies today are far more used to and exposed to such stories thus arguably the media has less effect on them - i.e. creating moral panics with the intention of mass controlling the population- it is worth to note that such statement is rather far from true as there are far more mediums, platforms and sources of information today than in the past. The added intensity, mass and speed of information available today and the normalisation and incorporation of crime in people’s everyday lives (e.g. normalisation of crime in movies, violence-focused games, and the changed perception of morality and moral attitudes), do not negate the effect of moral panics; it is simply different to the traditional form and manner it had in previous years. Therefore, it is not necessarily the role and involvement of the media that has decreased, but rather that the range of available media platforms has increased (and thus divided) making it seem as though it has less of an effect today. What is different today, is that such involvement and effect is not as recognisable or identifiable because it is greatly nurtured within societies. Societies are perhaps less aware of it, but the effect remains.


To sum up, crime or criminal behaviour in many cases is socially construed in order to control human behaviour and interaction and this process is largely determined and relied on the Media. ‘Crime exists only when the label and the law are successfully applied to an individuals’ behaviour’[11]. What the media projects and focuses on, affects how people react to it and their perception of deviance and morality. Marx argued that in capitalists societies the state is controlled by those who own the means of production. This can be used in analogy to those who own or can take advantage of the Media as they can filter what is seen and what is not.

[1] R v R [1991] 3 WLR 767 HL [2] Louk H.C Hulsman, ‘Critical Criminology and the Concept of Crime’ (1986) [3] Peter L. Berger;Thomas Luckmann, The Social Construction of Reality (1967) [4] Howard S. Becker, Outsiders (1963) [5] Nills Christie, ASuitabla Amount of Crime (2004) [6] Tim Newburn, Criminology (2007), p.9 [7] C. Wright Mills, The Power Elite (Oxford University Press, 1956) [8] Howard S. Becker, Outsiders (1963) [9] Erich Goode; Nachman Ben-Yenuda, ‘Moral Panics: Culture, Politics, and Social Construction’ (1994) [10] Angela McRobbie; Sarah L Thornton, ‘Rethinking “moral panic” for Multi-Mediated Social Works, (1995) [11] John Muncie; Eugene Mclaughlin, ‘The Problem of Crime’ (Sage 2002)


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