Transfer Pricing change in threshold
Transfer pricing rules and documentation requirements are applicable in Cyprus as from January 2022 – all in line with the OECD TP Guidelines. The new rules require domestic and cross-border intra-group transactions to be documented for Cypriot TP purposes.
The TP rules are effectively applicable for the tax year 2022, which means that the affected businesses should have the TP study ready by the Income Tax Return submission deadline (i.e., for the tax year 2022 – it is 31 March 2024).
Also, on 1 February 2024, the Cyprus Tax Department announced the increase of the threshold for the preparation of a Cyprus Local File for the tax year 2022 onwards, as follows:
- €5.000.000 for related party transactions in the category of financing transactions; and
- €1.000.000 for the rest categories of related party transactions, i.e., goods, services, intellectual property and other (before the threshold was €750,000 for any category).
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