Cyprus: Changes anticipated on acceptable profit margins between related companies

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cyprus: Changes anticipated on acceptable profit margins between related companies

intl-updates-small.jpg
nicolaou.jpg
kokoni.jpg

Maria Nicolaou

Zoe Kokoni

The Cyprus tax authorities, taking into consideration the international developments (OECD/G20 initiative – BEPS), have decided to amend the tax regime in relation to profit margins on loans between related parties.

Specifically, it is expected that as of July 1 2017, all loans between Cyprus tax resident companies and their related companies, will now have to be supported by transfer pricing studies. These will have to be prepared by independent experts and be based on the OECD principals. This new rule will affect all the financial transactions between related companies for both tax assessment purposes and for the issuance of tax rulings.

In addition, all tax rulings that have been issued up to June 30 2017 in relation to this subject will become void.

As a result of the above, we strongly advise clients and other interested parties to start reviewing their group structures.

Maria Nicolaou (maria.nicolaou@eurofast.eu) and Zoe Kokoni (zoe.kokoni@eurofast.eu), Nicosia

Eurofast Taxand Cyprus

Tel: +357 22699222

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Corporate counsel should combine deep technical knowledge with strategic dynamism, says Agarwal, winner of ITR’s EMEA In-house Indirect Tax Leader of the Year award
Luxembourg’s reform agenda continues at pace in 2025, with targeted measures for start-ups and alternative investment funds
Veteran Elizabeth Arrendale will lead the new advisory practice, which will support clients with M&A tax structuring, post-deal integration, and more
MAP cases keep increasing, and cases closed aren’t keeping pace with the number started, the OECD’s Sriram Govind also told an ITR summit
Nobody likes paperwork or paying money, but the assertion that legal accreditation doesn’t offer value to firms and clients alike is false
Ryan hopes the buyout will help it expand into Asia and the Middle East; in other news, three German finance ministers have called for a suspension of pillar two
SKAT, which was represented by Pinsent Masons, had accused Sanjay Shah and other defendants of fraudulent dividend tax refund claims
TP managers must be able to explain technical issues in simple terms, ITR’s European Transfer Pricing Forum heard
Prudential had challenged HMRC over VAT group relief; in other news, Donald Trump unveiled timber and wood tariffs, and the European Commission published a ViDA implementation strategy
Australia’s CbCR rules have ‘widespread support’ and do not put American companies at a competitive disadvantage, the FACT Coalition said
Gift this article