Stepping up from TX (CYP) to ATX (CYP)

The aim of Advanced Taxation – CYP (ATX-CYP) is to ensure candidates can provide individuals and businesses with the information and advice they require regarding the impact major Cyprus taxes may have on various financial decisions and situations.

The emphasis is on the practical application of tax rules to client scenarios and the provision of clear advice and recommendations. It should also be noted that the ability to communicate with clients, the Tax authorities and other professionals, is one of the four main abilities required of candidates sitting ATX-CYP.

The syllabus

ATX-CYP is directly connected to Taxation – CYP(TX-CYP). Knowledge and understanding of the technical content of TX-CYP is therefore vital for candidates to be successful at ATX-CYP. It is quite possible that the technical content of an ATX-CYP question is drawn mainly from the TX-CYP syllabus. However, such a question will require the analysis of information provided and the application of technical knowledge to the situation, in order to resolve a problem.

The ATX-CYP syllabus expands on the coverage of income tax, corporation tax, capital gains tax, special defence contribution and VAT. It also introduces stamp duties and transfer fees. The syllabus is wide, as befits an optional exam at this level. New technical content clearly identified in the Study Guide, will be examined regularly.

While no part of the syllabus is more important than others, it should be recognised that knowledge of all technical areas of the syllabus is essential in order to pass the exam.

The technical areas included within the syllabus are set out in the Study Guide on the ACCA website. Candidates should always check the website for the latest Study Guide relevant to their exam session, to ensure that nothing has changed and hence the learning they are about to embark on is up to date.

Candidates are required to:

  • Explain the legislation
  • Apply their knowledge to the scenario of the exam question
  • Calculate the relevant taxes
  • Compare the options applicable in the questions
  • Be able to advise on the best option and suggest effective and legal ways to reduce tax liabilities for the client
  • Be able to advise on the statutory requirements – ie tax return submission dates and tax payable due dates

All candidates must be familiar with the new legislation changes enacted up to 30 September of the previous year.

The style and format of the exam

The ATX-CYP exam is currently offered in a computer-based format since June 2021.

ATX- CYP consists of two sections, A and B. Since June 2018, all questions in Sections A and B are compulsory. Questions 1 and Question 2 in Section A are worth 35 and 25 marks respectively. Question 1 includes 4 professional marks. Questions 3 and 4 in Section B are each worth 20 marks each. The exam format will change for the June 2023 exam and it is expected that the full exam will contain 20 professional marks and 5 Ethics marks out of the 100 marks available.

Candidates are required to answer all questions in the question paper. The entire syllabus is examinable in both sections of the exam.

Section A

  • Questions require candidates to analyse the information given in the case scenario and use any guidance given to help address the requirements.
  • Both questions are likely to deal with a number of different taxes.
  • Question 1 will require a report, memo, letter or email. Format marks will be awarded when candidates illustrate their answers in a professional manner. Questions may require candidates to address ‘the Cyprus tax consequences’ of a given situation without indicating which particular taxes to consider or may specifically allocate marks to each type of tax involved.
  • The students should be able to demonstrate careful time management (as section A is relatively large) and they are advised to use the number of marks allocated to each requirement to determine how much time to spend on each part.
  • As previously mentioned, Question 1 carries 4 marks for professional skills (known as professional marks). In order to score well, candidates must first satisfy the requirement in relation to the style and format of the document (report, email, etc.) requested.
  • Question 1 usually involves numerical calculations for a number of taxes. Bear in mind that in Question 1 the calculations get more marks compared to the narrative part.

Section B

  • Questions in section B usually contain an introductory paragraph, which outlines the technical areas within the question, together with concise structured information headings and subheadings to make them easier to navigate through the question.
  • Questions in this section are usually smaller and relevant only to a specific part of the syllabus – eg VAT, employment income or company losses.

In summary

Throughout the exam, candidates are expected to be able to identify issues, as well as demonstrate detailed basic and advanced knowledge of the Cyprus tax system.

Calculations are normally required to support advice and explanations, and not used in isolation. It is often left upon the candidates to decide what calculations to produce to do this in the most efficient manner. Advice as to how to approach a given issue may be provided in the question.

There is no specific allocation of marks for numerical calculations versus narrative balance within TX-CYP and ATX-CYP. However, TX-CYP is weighted towards numerical calculations, whereas ATX-CYP is weighted towards narrative explanations (apart from Question 1 that calculations are weighted at least the same as narrative explanations).

The ability of candidates to explain their treatment, opinion and advice is vital.

It is important to note that this does not mean that candidates need to write with perfect grammar or spelling; it means they need to be able to explain and communicate clearly what they want to say.

Approach to the exam

When preparing for the ATX-CYP exam, candidates need to go through several stages in order to be successful.

  1. Acquire the knowledge and obtain a solid understanding of the subject area. For both levels within the taxation stream, a good understanding of the Cyprus tax system is vital to a successful exam result. Candidates exempted from the TX-CYP module, should ensure they have a solid knowledge of the TX-CYP before joining the ATX-CYP course. They must ensure they revise the current TX-CYP syllabus and have no knowledge gaps.

  2. Use the syllabus provided in the website and make sure you cover it all. Use approved material available in the market to help you obtain a solid understanding of the syllabus.

  3. Consolidate understanding questions that focus on specific areas. Start first with the TX- CYP questions which are simpler and focus on individual areas of the syllabus. Although these questions may assist understanding of the basic approach to the topic, they do not necessarily provide a grasp of exam technique for the ATX-CYP exam.

  4. To improve your exam technique and approach, practice exam standard questions written by both “ACCA’s Recognised Content Provider (RCP)” and ACCA past exam questions. All the ACCA’s exams require candidates to apply their knowledge at an appropriate level for the stage of the exam. Candidates who attempt exams without practicing exam-standard questions are unlikely to pass as there is no other way to master the required exam technique or technical understanding.

  5. Special care should be taken when students are using ACCA past papers which are included on the ACCA’s website. These papers are based on the legislation in force at the time of the exam session. This means that some of the content of the question or answer may be out of date.

  6. RCPs are allowed to use these papers and reproduce them, so their content is relevant to the related exam session. RCPs may also write their own exam standard questions which may focus on areas that have not yet been examined. Students are encouraged to acquire the approved learning material and use it as a reference for their studies.

  7. When practicing exam standard questions, it is vital to spend time reviewing your answer against the model answer to learn what was done well and what needs to be improved. Where mistakes were made, effort must be made not to repeat them. It should be noted that the model answers always contain more than a candidate needs to write to achieve a good pass. Remember that the marking scheme usually contains extra marks.

In the exam

When students have an exam paper in front of them, even though the questions are all compulsory, it is recommended to start from the question they feel more comfortable with. By doing so, it will boost their confidence and have a better chance of passing the exam. In addition, students should pay attention to the following in order to maximise their chances of success in the ATX-CYP exam.

  1. Read the requirement carefully. The requirements are usually well worded to provide guidance as to the style and content of the answers. Pay attention to the command words (ie calculate, explain etc.) and any additional guidance given in the question.

  2. Produce a plan and write a list of what is required in the question. It may be helpful to tick off the tasks as they are addressed. Remember that marks are awarded for satisfying the requirements and not for other information even if it is technically correct.

  3. Need to use headings and subheadings – eg 
    (1) Income Tax Implications
    (2) Capital Gains Tax implications
    (3) VAT implications                                                                               

    (1) Employment Income
    (2) Rental Income   
    (3) Interest/Dividends
    (4) Foreign Pension

  4. Students must write the legislation relevant to the question and provide as many explanations as necessary. Then they must relate the legislation(knowledge) to the case scenario and should not provide general explanations or long introductions. They should be specific and precise. Candidates should think before they write, and then write whatever is necessary to satisfy the requirement.

    Do not rewrite the facts of the question. It will not give you any marks at all.

  5. When students are writing and explaining the legislation, the maximum detail is required. They need to reflect in their answer the exact provisions of the relevant legislation. Using general (sometimes vague) wording in their answers will not give them any credit, (not even partial sometimes).

  6. They must always (1) write how to pay the relevant tax (2) state the deadlines to pay and returns to submit (3) consider all relevant taxes – should not forget the Social Insurance Contribution, General Health Scheme, Transfer fees, Stamp duties where applicable.

  7. Always advise on how to reduce the taxes payable by the client using legal methods.

  8. When candidates are asked to calculate, there is no need to explain what they are going to do before they do it. Just show the calculation, try to carry it out in the most efficient manner. If there is a need for advice, compare the options and suggest the best course of action.

  9. Pay attention to the number of marks available – this provides a clear indication of the amount of time that should be spent on each question part. Ensure the allocated time is spent for each question (for example for a 20-mark question you will need 20 marks x 1.8 minutes per mark =36 minutes and should never exceed the allocated time).

  10. Last but not least, when attempting the real exam, it is important to follow the instructions of the exam and answer all the questions. This way a candidate will have the best possible chance of passing by attempting the 100 marks available in the exam in the time available. When a candidate does not answer all the exam questions, they are reducing their chance of passing as they will not be marked out of 100 marks but only the maximum marks attributed to the questions or question parts that have been attempted.

Good luck with your ATX-CYP exam!

Polina Jacovidou Michael, PwC’s Academy Cyprus