Cyprus introduces all-new Transfer Pricing

Cyprus recently introduced all-new Transfer Pricing (TP) rules and reporting obligations that went into effect retroactively as of 1 January 2022. 

The new TP requirements for businesses were voted into law by the Cyprus House of Representatives on 30 June 2022 and were published in the Cyprus Government Gazette on 8 July 2022.

The new law is in line with the TP Guidelines for Multinational Enterprises and Tax Administrations of the OECD and within the framework of Action 13 of the BEPS initiative. 

TP refers to how income/expenses from transactions are allocated to related companies and permanent establishments. Before the enactment of this law, the legal basis to address TP issues rested on the arm's length principle.