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Cyprus ASP — CRS Financial Institution reassessment

The Cyprus Tax Department has drawn administrative service providers’ attention to a paragraph it describes as newly added by the OECD to the 2025 consolidated CRS text: remuneration for an entity’s relevant activities counts even when it is paid to a different entity. The Department has told administrative service providers to reassess their classification and report the result — whatever it is.

CRS Section VIII · consolidated text 2025 · OECD FAQ Part VIII Q9 · Cyprus Tax Department, 28 July 2026

Notification deadline

18 September 2026

Every ASP must email the result of its assessment to [email protected] using the prescribed subject line. The obligation to notify applies whether or not you conclude you are a Financial Institution.

Read the announcement (PDF, Greek) — a copy of the Tax Department’s announcement of 28 July 2026, reproduced here for reference.

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Reassess one entity

Runs in your browser · nothing uploaded

Assess a single legal entity — a corporate trustee, nominee company, or the ASP itself. If you administer several entities, run each one separately: the whole point of the change is that entities which looked out of scope on their own accounts may not be.

Step 1 — Relevant activities

Section VIII A(6)(a)

Which of these does the entity carry out, as a business, for or on behalf of a customer?

Acting as trustee, or otherwise investing, administering or managing Financial Assets or money on behalf of other personsThe core corporate trustee activity, and the one the OECD example is about.
Individual or collective portfolio management
Trading in money market instruments, foreign exchange, transferable securities or commodity futures
Holding Financial Assets for the account of others — custodial servicesTested at a lower threshold of 20%, and the OECD paragraph expressly extends to custodial fees paid to another entity.

Step 2 — The gross income test

Consolidated CRS 2025 · new paragraph

Measured over the shorter of the three-year period ending 31 December of the preceding year, or the period the entity has existed.

Total gross income of the entity All income of the entity over the measurement period, from every source.
Remuneration for relevant activities received directly Fees the entity itself charged and received for the activities above.
Remuneration for the entity’s relevant activities paid to another entity The new paragraph Fees charged by a law firm, accounting firm or group company to the client for this entity’s services — trustee services bundled into an overall package, or custodial fees invoiced elsewhere. Previously often excluded. Now counted.

Step 3 — The managed-by test

Section VIII A(6)(b)

Only relevant to the second type of Investment Entity. Skip if Step 1 already identifies relevant activities carried out as a business.

Is the entity’s own income primarily from investing, reinvesting or trading in Financial Assets?This is about the entity investing its own assets, not managing others’.
Does another Financial Institution have discretionary authority to manage the entity’s assets, in whole or in part?The OECD FAQ confirms this covers discretionary authority over the assets even where the managing entity does not manage the entity itself.
What this means: an indicative reassessment against the tests as amended, not a determination. Whether a particular fee relates to this entity’s relevant activities rather than to the adviser’s own work is a judgement about the engagement and the invoicing, and it is the judgement the whole assessment turns on. The Tax Department can examine compliance under sections 27 and 30 of Law 4/1978 and section 22Γ of Law 205(I)/2012 as amended by Law 60(I)/2016, so the reasoning should be documented. This is not tax or legal advice.

If the answer is yes, registration is only the beginning. The CRS module takes account data in any shape, applies due diligence outcomes, runs TIN structure checks and produces validated XML for submission — with a free tier to start.

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What changed

The fee no longer has to reach you

The OECD example is precisely the Cyprus ASP structure, which is why the Tax Department has written to the sector rather than waiting.

Before

No fee, no income

A corporate trustee appointed by a law firm, charging the client nothing directly, could show little or no gross income from relevant activities. The gross income test was hard to fail because there was barely any income to attribute.

After

The package counts

Where the client pays the law or accounting firm for everything, including the appointment of the corporate trustee and the trustee services, that remuneration is taken into account for the trustee’s own gross income test.

Also

Custodial fees too

The OECD text says the same issue arises for entities providing custodial services where the fees are paid to another entity. Custodial Institutions are tested at 20%, so a smaller share of income puts them in scope.

Reviewed 21 August 2026 · source: Cyprus Tax Department announcement of 28 July 2026 · Consolidated text of the CRS (2025) · OECD CRS-related FAQs, Part VIII Question 9 · Cyprus Tax Department announcement of 28 July 2026

Scope

What this tool does

It applies the amended gross income test and shows what the amendment changed for your entity. It does not decide which fees belong to it.

It doesShow the effect of the change

  • Applies the 50% Investment Entity test and the 20% Custodial Institution test.
  • Calculates the outcome with and without indirect remuneration, so the effect of the new paragraph is explicit.
  • Tests the managed-by limb separately for the second type of Investment Entity.
  • Sets out the three actions the Tax Department requires, with the deadline.
  • Drafts the notification email using the prescribed subject line format.
  • Flags that notification is required even where the conclusion is negative.

It does notAttribute the fees

  • Decide which part of a bundled fee relates to this entity’s relevant activities.
  • Determine the correct measurement period, or handle entities in existence under three years.
  • Assess whether a managing entity genuinely has discretionary authority.
  • Address the position of the trusts or companies the ASP administers, which have their own classification.
  • Register you, or submit anything to the Tax Department.
  • Constitute tax or legal advice.

The entities you administer need classifying too

If the ASP becomes an Investment Entity, the trusts and companies it manages may follow. The general CRS decision tree walks the whole Section VIII test.

CRS entity classification →

Nothing you enter here leaves your browser

Your answers, the entity name and the figures are held in the page and discarded when you close or reload it. Nothing is sent to REGREP, written to a log, saved, or passed to any analytics tool.

The draft email is composed in your own mail client from text generated on your machine. We never see it, and we are not a party to your correspondence with the Tax Department.

Questions

About the reassessment

What exactly changed?

The consolidated text of the CRS published in 2025 clarifies that, for the purposes of the gross income test, all remuneration for the relevant activities of an entity is taken into account regardless of whether it is paid directly to the entity being tested or to another entity. The worked example is a professional accounting or law firm that sets up a trust and appoints a corporate trustee, where the client pays the firm for the whole package including the trustee services.

Do I have to notify even if I am not a Financial Institution?

Yes. The Tax Department asks ASPs to inform it of the result of the assessment, not only of a positive finding. A negative conclusion is still a result, and notifying it is what evidences that the assessment was carried out.

What subject line must the email use?

The announcement prescribes it: «Κατάταξη των Παρόχων Διοικητικών Υπηρεσιών (ASPs) ως Χρηματοοικονομικά Ιδρύματα για σκοπούς CRS – [Επωνυμία ASP]», with your own name in place of the bracketed text. The tool fills that in for you.

What are the thresholds?

An entity is an Investment Entity of the first type where gross income attributable to the relevant activities equals or exceeds 50% of its gross income. A Custodial Institution holds Financial Assets for others as a substantial portion of its business, which is tested at 20% of gross income. Both are measured over the shorter of the three-year period ending 31 December of the preceding year, or the period the entity has been in existence.

What is the second type of Investment Entity?

An entity whose own gross income is primarily attributable to investing, reinvesting or trading in Financial Assets, and which is managed by another Financial Institution. Both limbs are required. The OECD FAQ confirms that “managed by” covers an entity with discretionary authority to manage the assets in whole or part, even where it does not manage the second entity itself.

What happens if I conclude I am in scope?

Register in the CRS filing system through the gov.cy service at gov.cy/service/crs-dac2-engrafi-chrimatooikonomikou-forea, then apply due diligence and report. The Tax Department has reminded ASPs that it can examine compliance with CRS obligations, including the obligation to register and to submit the required data, under sections 27 and 30 of Law 4/1978 and section 22Γ of Law 205(I)/2012 as amended by Law 60(I)/2016.

Do you store what I enter?

No. Everything is held in the page and discarded when you close or reload it. The draft email is generated locally and opens in your own mail client.

Notifying is one email. Reporting is a system.

If the reassessment puts you in scope, create a free account and take account data through validation to submission-ready XML.

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