Article 33 & Article 33C of the Income Tax Law, Κ.Δ.Π. 314/2022 and Κ.Δ.Π. 273/2022 with effect as from 1st January 2022
As of 1 January 2022, the Cyprus Tax Department introduced the new Transfer Pricing rules under the Income Tax Law article 33, Κ.Δ.Π. 314/2022 and Κ.Δ.Π. 273/2022 with the scope for each business to file obligations of the controlled transactions and/or balances transactions (controlled transactions refer to transactions between related parties (incl. shareholder current accounts)), on an annual basis with the following reports:
- Cyprus Local File (if controlled transactions cumulatively per category exceed €1,000,000 and/or €5,000,000 for financial (loan) transactions).
- Master File (exempted if not constitute the Ultimate parent entity (or Surrogate Parent entity) – big size groups).
- Summary Information Table (compulsory and submitted together with the tax return).
Small size exemption applies as per aforesaid criteria mentioned in the parenthesis.
The Local File focuses on information relevant to the Transfer Pricing (TP) Study, covering transactions between related parties, including relevant financial information, a comparability analysis and the selection and application of the most appropriate TP method.
The Summary Information Table is compulsory to be prepared and submitted by every business as long as controlled transactions and/or balances arise within a tax year, irrespective of the value of the said transactions. The submission deadline of the Summary Information Table for the year 2022 is on the 30 November 2024 and is submitted electronically through Tax For All (TFA) system.
At ACLA AUDITORS we can assist you on the preparation and submission of the aforesaid files and reports according to your needs and responsibilities, as per Income Tax Law.