The Cypriot broker will inform the Tax Office about your transactions

Are you trading with a Cyprus broker? You must be prepared for the fact that your Tax Office will receive (indirectly) the history of your transactions from it - and this is already for 2016. This is the result of new changes in Cypriot law introduced by the Ministry of Finance.

The Tax Office will find out about your transactions

On 21 July 2017. CySEC issued a message addressed to Cypriot financial institutions on the entry into force of the regulations (so-called CRS Decree), which require mandatory reporting of the accounts and transactions of their clients to the Cyprus Tax Department (so-called Tax Office of Cyprus).

Recently, this office is obliged to pass the information on to the tax office of a given client. The regulations apply to custodian institutions, depositaries, investment firms (including Forex brokers) and some insurance companies.

Transaction and account status reporting is to provide a range of information about residents (individuals and enterprises) of other countries from the European Union and the OECD group, including Poland. What does this mean in practice? Well, from the perspective of a trader, his Cypriot broker will be required to report the history of transactions concluded on the Forex platform to the Cypriot Tax Office, which will forward them to the tax office in the country of your residency. And he will have time for this to 30 June of the next year (in other words, for 2016 to 30 in June, 2017).

This should not leave any doubts when asking: "Do I have to account for profits from a foreign broker?".

The changes will include transactions for the year 2016

A comprehensive document released in May 2017 by the Cypriot Ministry of Finance (available under THIS LINK) accurately describes the conditions for the exchange of information. According to him, not all bills will be reported. On the 19 website you can read that in the case of individuals and accounts opened before the end of 2015 year bills with a deposit not exceeding 1000 USD will not be taken into account. Otherwise, it is expected that such information will be forwarded.

The 88-page document explains in detail the requirements for each type of institution, but in the case of traders, the most important part is the one addressed to investment firms. And here they come in 20 and 26 pages of the document on which we can, among others read what exactly will be forwarded to the relevant office. And it will be the entire set of our data together with the number of the account and the profit or loss achieved.

The document clearly indicates that reports will also be sent for the year 2016, that is, in the event that someone "forgot" to settle accounts by April 30 this year, now he may find himself in a difficult situation.

PIT-8c optional

The legal obligation to issue PIT-8c will continue to weigh only on Polish brokerage houses. This means that if we have an account with a Cypriot broker, we will still not receive any PIT and ultimately the settlement of our transactions will rest only on our shoulders. The situation gets much more complicated when keeping accounts in a currency other than PLN, which requires the calculation of each transaction at the NBP rate from the previous day (more on tax settlements).

Read: Tax season - general information

At the moment, similar ideas from other EU countries are heard but no details have been provided yet.

CySEC message

Letter from the Cypriot Ministry of Finance