Cyprus Introduced New Transfer Pricing Rules And Reporting Obligations

On June 30th, 2022, the Cyprus Parliament passed and voted into law detailed legislation on transfer pricing.

Bringing Cypriot Income Tax Law in line with the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations and within the framework of Action 13 of the BEPS action plan.

The new Transfer Pricing guidelines are in effect retroactively as of 1 January 2022, and below is a summary of the key changes and the general transfer pricing rules which come into play:

• Transfer Pricing refers to the allocation of income/prices of goods and services to related companies and permanent establishments. Prior to this, section 33 of the income tax law and the arm's length principal was the basis used for addressing Transfer Pricing issues;