In December 2025, the House of Representatives approved
amendments to the Income Tax Law of 2002 (as amended)
("ITL"), forming part of a broader tax reform initiative.
The amendments were published in the Official Gazette of the
Republic of Cyprus on 31 December 2025 and are effective from
1 January 2026. Among other changes, the reform
introduced important updates to Article 33 of the
ITL, impacting Cyprus transfer pricing documentation
requirements.
Local File thresholds from 2026 and onwards
Under the existing framework, Cyprus tax resident persons and
Permanent Establishments (PEs) of non-resident entities are
required to prepare a Transfer Pricing Local File where they engage
in controlled transactions, i.e. transactions with connected
persons, and the applicable materiality thresholds are
exceeded.
