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ARTICLE · 21 JULY 2023

Cyprus Transfer Pricing (TP) Simplification Measures

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On 6 July 2023 the Cyprus Tax Department issued a circular (6/2023) that introduces simplification measures for taxpayers that are exempted from the obligation of preparing a TP Local file...

CyprusTax
Lefteris Androkli
Lefteris Androkli
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Introduction

On 6 July 2023 the Cyprus Tax Department issued a circular (6/2023) that introduces simplification measures for taxpayers that are exempted from the obligation of preparing a TP Local file (i.e., their transactions with related parties, are below €750.000 per category of transactions).

The simplification measures apply as from 1 January 2022.

These simplification measures relate to:

  1. Simplified transfer pricing documentation requirements
  2. Introducing safe harbor rates for certain types of transactions

These are further explained below.

A. Simplified transfer pricing documentation requirements

The minimum documentation requirements apply in cases where the transactions between related parties do not exceed the €750.000 threshold per category of transactions. The minimum documentation requirements to support the arm's length nature/pricing of such transactions are as follows:

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