On 30 June 2022, the Cyprus Parliament has voted to law the long-anticipated transfer pricing documentation requirements into law, accompanied by detailed regulations applicable from the 1 January 2022. These measures are fully aligned with the recommendations outlined in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.

The new documentation requirements apply to Cypriot tax-resident persons and permanent establishments (PEs) of non-tax-resident entities engaged in certain transactions with related parties. The TP framework covers all types of transactions between related parties (if in excess of €750,000 per category of transactions), such as goods, services, transaction involving IP, financial services and others.

Objectives:

The primary objective of this framework is to ensure compliance with the arm’s length principle, promoting transparency and consistency in transfer pricing practices. Further such TP framework aims to increase transparency and ensure that related-party transactions are conducted at arm’s length, thus preventing tax base erosion and profit shifting (BEPS). The regulations also aim to provide tax authorities with the necessary information to assess transfer pricing practices more effectively.

George Kaimakliotis & Co Ltd is here to guide you through these new requirements, ensuring your compliance and assisting with the preparation of transfer pricing documentation tailored to your specific needs. Contact us for expert advice and support.