31 JULY 2023
The Cyprus Tax Department issued a Circular in July 2023 regarding the simplification measures for Transfer Pricing (TP), with retroactive effect as of 1 January 2022. This provides guidance regarding the documentation of intercompany transactions in cases where the taxpayers are not obliged to prepare a Cyprus Local File (i.e. not obliged to follow the full TP rules).
The Circular introduces simplified TP documentation requirements regarding transactions with related parties (‘controlled transactions’) for which there is no obligation to prepare a Cyprus Local File, and also introduces optional simplification measures in the form of minimum/ maximum acceptable profit margins (‘safe harbours’) for certain types of controlled transactions.
More details regarding the TP simplification measures can be found in our relevant Information Sheet by clicking here.