Cyprus Transfer Pricing Rules In 2026

Transfer pricing often first appears to be an accounting question. The legal position matters just as much. A payment between companies in the same group may be recorded correctly in the accounts and still need to be tested against the terms independent parties would have agreed. In Cyprus, that test sits alongside reporting and documentation obligations.

Cyprus introduced its current transfer pricing documentation framework with effect from 1 January 2022. The underlying rule is the arm’s-length principle: connected persons should transact on terms that independent parties would have agreed in comparable circumstances. If a controlled transaction does not meet that standard, the Tax Department may adjust the taxable profits of the relevant taxpayer.