- Adoption of Transfer Pricing Rules by the Cyprus Commissionaire of Taxation
- April 17, 2017 | Author: Soteris Flourentzos
- Law Firm: Soteris Flourentzos & Associates LLC - Limassol Office
The Commissionaire of Taxation has recently announced that as from the 1st of July 2017, the Tax Department will not any longer accept the minimum net taxable profit margins of 0.125% - 0.35% on back-to-back financing arrangements and that the interest margins should be supported by a proper transfer pricing study prepared by an independent advisor.
All rulings provided in the past by the Tax Department confirming the acceptability of the minimum back-to-back net taxable profit margins will become not binding on the Tax Department.
The Commissionaire of Taxation has not yet set the transfer pricing rules but, it is anticipated that these rules will be consistent with the OECD guidelines on transfer pricing.