On Wednesday, the European Commission sent a reasoned opinion to Cyprus, as part of an infringement procedure, due to the incomplete transposition of the directive on administrative cooperation in the field of taxation and the exchange of information between Member States.

Along with Belgium and Bulgaria, Cyprus has not yet adopted or notified the Commission of all the necessary national measures to implement the directive, which amends the existing framework for administrative cooperation in the field of taxation, leading the Commission to proceed with the procedure in all three Member States. 

Directive (EU) 2025/872 provides for the standardization of the collection of the top-up tax information return and the automatic exchange of relevant data between the tax authorities of the Member States. This obligation is part of the implementation of the directive on the global minimum tax rate for multinational groups and large domestic companies.

According to the European Commission, tax authorities across the European Union should have begun exchanging the relevant information as of June 2026. However, Cyprus’s failure to fully transpose the directive into national law is creating obstacles to the smooth implementation of the EU framework.

The Commission had sent a letter of formal notice to Cyprus in January 2026. Since the shortcomings have not been fully remedied, the EU’s executive branch has now issued a reasoned opinion, which is the next step in the infringement procedure.

Cyprus has two months to respond and take the necessary compliance measures. Otherwise, the European Commission may refer the case to the Court of Justice of the European Union, seeking the imposition of financial penalties.

Source: CNA