Transfer Pricing

As from 1 January 2022 transfer pricing documentation requirements apply to Cyprus taxpayers.

These requirements apply to all Cyprus tax resident companies, as well as permanent establishments of non-resident companies.

Transfer Pricing Documentation requirements, submission deadlines and penalties
Taxpayers, according to the fulfilling of certain conditions, are required to maintain, prepare and submit the below transfer pricing documentation:

(a) Summary Information Table
The preparation and submission of a Summary Information Table by all taxpayers. The Summary Information Table contains high-level information for the related party transactions.

The Summary Information Table preparation for a particular year must be submitted together with the taxpayer’s Corporate Income Tax Return for that year.

In cases where a taxpayer fails to submit a Summary Information Table, a penalty of €500 will be imposed.

(b) Maintaining a Cyprus Local File
In cases where the aggregated value of transactions with related parties in a tax year exceed (or should exceed based on the arm’s length principle*) the amount of €750.000, per category of transaction, the taxpayer is required to maintain a Cyprus local file.

The Cyprus Local File preparation for a particular year should be no later than the due date for submitting the taxpayer’s Corporate Income Tax Return for that year.

Where a taxpayer has received a notice from the Cyprus Tax Department to provide the Local file and fails to do so within 60 days, it will give rise to penalties ranging from €5.000 to €20.000**.

(c) Maintaining a Master File
In cases where the Cyprus taxpayer is either the Ultimate Parent Entity or the Surrogate Parent Entity of an MNE Group, and the consolidated group revenues are exceeding €750 million for Country-by-Country Reporting purposes, the taxpayer is required to maintain a master file.

The Master File preparation for a particular year should be no later than the due date for submitting the taxpayer’s Corporate Income Tax Return for that year.

Where a taxpayer has received a notice from the Cyprus Tax Department to provide the Master File and fails to do so within 60 days, it will give rise to penalties ranging from €5.000 to €20.0002.

*Conditions made or imposed in transactions between associated persons should be similar to conditions applied between independent parties.

**Depending on the length of the delay.