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

A lack of commitment from major jurisdictions and the associated compliance burden are obstacles facing the OECD initiative
Richard Gregg is no longer fit and proper to be a tax agent, said the TPB; in other news, MHA completed its acquisition of Baker Tilly South-East Europe
Recent Indian case law emphasises the importance of economic substance over mere legal form in evaluating tax implications, say authors from Khaitan & Co
PepsiCo was represented by PwC, while the ATO was advised by MinterEllison, an Australian-headquartered law firm
Three tax experts dissect the impact of a 30% tariff that has shaken up trade relations between South Africa and the US
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Americas Tax Awards
As we move into an era of ‘substance over form’, determining the fundamental nature of a particular instrument is key when evaluating the tax implications of selling hybrid securities
It stands in stark contrast to a mere 1% increase in firmwide revenue since last year
It follows a court case concerning a Freedom of Information request lodged by the founder of a software company
After years of deafening silence, the UK tax authority is taking overdue action against corporates that fail to prevent the facilitation of tax evasion
Gift this article