Starting January 1, 2022, Cyprus has introduced robust transfer pricing rules for transactions between related companies. Cyprus-based businesses must maintain meticulous documentation to prove compliance with the arm’s length principle. This documentation encompasses transactions exceeding €5,000,000 for controlled transactions falling under the category of “Financial Transactions and €1,000,000 for all other categories of controlled transactions per tax year.

In general, transfer pricing regulations

When a business engages in transactions with related entities across borders, transfer pricing policies must be established that ensure transactions are conducted at arm’s length prices. This helps prevent profit shifting and transfer pricing disputes with tax authorities.

In Cyprus, transfer pricing regulations

As of January 1, 2022, Cyprus has implemented comprehensive regulations governing transfer pricing, specifically for “transactions between related companies.” In Cyprus, the obligation rests on Cyprus companies to compile a meticulous transfer pricing study and maintain a robust transfer pricing Cyprus documentation file. This file serves as evidence that intercompany transactions with related parties have adhered to the arm’s length principle.

Cyprus companies are mandated to maintain a transfer pricing Cyprus Documentation File encompasses Cyprus companies or Cyprus permanent establishments. Their intercompany transactions with related companies, where the term “related” includes companies that share a common direct or indirect ownership exceeding 25% (under specific conditions), are scrutinized. These transactions, collectively categorized under goods, services, rights, other intangible assets, and financial dealings, should either exceed or have the potential to surpass the above thresholds per tax year if executed at arm’s length.

The content of the Cyprus Documentation File aligns with the recommendations set forth by the OECD. It delves into a comprehensive analysis of the financial and operational profile of the Cyprus company or Cyprus permanent establishment, the prevailing market conditions in which it operates, a methodical examination of the documentation procedures related to pertinent transactions, and the incorporation of comparison or reference data.

For in-depth insights into Cyprus Transfer Pricing regulations and guidelines, please refer to our publications by following the links below. These resources provide a wealth of knowledge to help you navigate the intricate landscape of transfer pricing in Cyprus, ensuring that your business remains compliant and well-prepared.


In conclusion, Cyprus’s introduction of comprehensive transfer pricing regulations underscores its commitment to transparency and fairness in international business transactions. Adhering to the arm’s length principle and maintaining meticulous documentation is pivotal for Cyprus-based companies. These regulations are designed to ensure compliance with OECD recommendations, and our publications offer valuable insights to assist businesses in navigating this intricate landscape. Staying compliant with Cyprus’s evolving transfer pricing landscape is essential for international enterprises seeking success in this dynamic business environment.

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