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 2026

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

Death, taxes and Deloitte hoovering up trophies at an ITR awards night. Isn’t that the saying?
AI, pillar two and joint audits could define the next era of tax controversy, says Baker McKenzie tax partner Ariane Calloud
Gregor McMillan of Howden explains how insurance-backed financing can help businesses and funds unlock liquidity from tax receivables and other contingent claims
The arrival of Alex Anderson swiftly follows that of funds tax specialist Stuart Alter and suggests the Tier 3-ranked firm has higher ambitions
One of the two appointments is EY’s Gordon McIntosh, who becomes the big four firm’s second senior tax departure in September
Balson's move from a Tier 1 practice to a Tier 3 competitor looks counterintuitive. The market data suggests it is anything but
Awards
It was another banner year for Deloitte, which picked up more awards than any other firm at a gala ceremony held at The Londoner in Leicester Square
The big four firm has been embroiled in a scandal over partners’ misuse of confidential board papers to pitch for and win corporate audits for Westpac and Dexus
Drawing on lessons from the PepsiCo case, tax lawyer Paul McNab explains why the ATO's latest royalty guidance should concern multinationals well beyond the technology sector
As pillar two exposes the limits of fragmented tax processes, organisations are rethinking their operating models to create the trusted data foundations that AI demands
Gift this article