Brussels: Cyprus is facing infringement proceedings initiated by the European Commission due to its failure to fully transpose certain EU directives into national law.
According to Cyprus News Agency, the Commission has issued a letter of formal notice to Cyprus for incomplete implementation of Directive (EU) 2023/2226, concerning tax transparency and the exchange of information on cryptoassets. This directive aims to enhance the sharing of tax information on cryptoassets among EU Member States, amending the existing framework for administrative cooperation in taxation.
In addition to Cyprus, similar notices have been sent to 11 other Member States, including Belgium, Bulgaria, Czech Republic, Estonia, Greece, Spain, Luxembourg, Malta, the Netherlands, Poland, and Portugal. The directive seeks to improve financial account information exchange to ensure greater transparency and compliance within the EU.
Furthermore, Cyprus is also among 15 Member States that have not fully transposed Directive (EU) 2024/1265 related to budgetary frameworks. The directive, which amends Directive 2011/85/EU, is aimed at strengthening budgetary policy frameworks to avoid excessive government deficits. The deadline for implementing this directive expired on December 31, 2025.
The European Commission has highlighted that the new rules under Directive (EU) 2024/1265 are designed to improve transparency, statistics, forecasts, and medium-term budgetary planning. Member States are required to adopt public accounting systems providing accrual data, ensure public access to budgetary data, establish independent budgetary institutions, and consider the macroeconomic impacts of climate change in budget planning.
Cyprus and the other Member States involved have a two-month period to respond to the European Commission, finalize the transposition of the directives, and report on the measures taken. Failure to comply could result in the Commission advancing to the next stage of the infringement procedure by issuing a reasoned opinion.