Costas Markides discusses Transfer Pricing rules recently
introduced in Cyprus
The need for establishing a set of Transfer Pricing rules is
based on the "Arm's Length principle" and is
perhaps the most important tax issue from an economic point of view
over the past 20 years. It is estimated that a percentage of
60%-70% of the economic and commercial activity internationally is
carried out between companies of the same group or between related
companies. The primary goal of Transfer Pricing rules is to ensure
that income generated within the same group and related companies,
is taxed in the same place where economic value is
created.
Simply put, Transfer Pricing rules aim to regulate the pricing
of transactions undertaken between related companies and ensure
that the same market conditions that apply for transactions
undertaken between unrelated companies (de-facto regarded as being
carried out at arm's length) are reflected and apply to
transactions carried out
