April 2009 -- During the recent G20 Summit in London, leaders of the world’s strongest economies classified Cyprus as a financial center that has substantially implemented the internationally agreed tax standard.

Following the Summit, the Organisation for Economic Co-Operation and Development (OECD) has issued on 2 April 2009 their long-awaited report on the progress made by financial centres around the world towards implementation of internationally agreed standards on exchange of information for tax purposes. 

Cyprus is officially included as a jurisdiction that has “substantially implemented the internationally agreed tax standard”, and as such is on OECD’s ‘White List’.

When combined with the following, Cyprus reinforces its status as one of the world’s most attractive financial centres.

RICH LIST: The leaders of the world’s 20 most financially robust nations pose for a group photo.

Exchange of information from a Cyprus perspective:

Following an amendment in the relevant national Cyprus Law (July 2008), Cyprus has enabled the lifting of bank secrecy and exchange of information with foreign tax authorities for non-Cyprus resident persons. This exchange of information is under specific conditions and only if it is provided so in the relevant paragraphs of the DTT between Cyprus and that country (i.e. it must include paragraphs 4 and 5 of Section 26 of the OECD model convention).

Way forward: 

This development will accelerate the ongoing efforts of Cyprus to conclude new DTTs since it can now include paragraphs 4 and 5 of Section 26 of the OECD model convention. Cyprus is currently under negotiations with many countries for concluding new DTTs. These countries are: Spain, The Netherlands, Portugal, Finland, Malaysia, Estonia, Lithuania, Latvia, Indonesia, Iceland, Sri Lanka, Morocco and Iran [Note: negotiations for a DTT with Luxembourg and Qatar have been concluded and the relevant DTTs are awaiting ratification].

Thus, Cyprus is expected to further strengthen its competitive advantage and image as a reputable and attractive financial centre. This will attract new foreign investments and enable Cyprus to have a wider appeal as one of the best jurisdictions in international tax planning; especially through the use of the Cyprus Holding Company.

Background information on the G20 Summit in London and the OECD report:

The G20 Summit in London took place at a time when the world confronts the worst economic crisis since the Second World War.  The London Summit brought together leaders of the 20 world’s major economies to take the collective action necessary to stabilise the world economy and secure recovery and jobs. Amongst other, it was agreed to introduce tougher financial regulations and sanctions against secretive tax havens and non-cooperative financial centres.

Real action was agreed at the Summit, including the allocation of a total of $3 trillion to help reverse the world economic crisis. Leaders agreed to:

Restore confidence, growth, and jobs
Strengthen financial supervision and regulation
Fund and reform our international financial institutions to overcome this crisis and prevent future ones
Promote global trade and investment and reject protectionism, to underpin prosperity
Build an inclusive, green, and sustainable recovery

Furthermore, Following the Summit and communiqué, the OECD issued on 2 April 2009 a detailed report on progress by financial centres around the world towards implementation of an internationally agreed standard on exchange of information for tax purposes. 

As per the official OECD website:

“The report produced following the G20 meeting, reflects the results of more than a decade of OECD work to bring greater openness and transparency to cross-border financial services.

The internationally agreed standard, developed by OECD and non-OECD countries in the context of the OECD’s Global Forum on Taxation and endorsed by G20 Finance Ministers in 2004 and by the UN Committee of Experts on International Co-operation in Tax Matters in October 2008, requires exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes.  It also provides for extensive safeguards to protect the confidentiality of the information exchanged.”

For more information, contact Andis P. Petrou at This e-mail address is being protected from spambots. You need JavaScript enabled to view it