Insider Business Cyprus to adopt new Transfer Pricing regime

Cyprus to adopt new Transfer Pricing regime

After consulting with professionals in the Mediterranean island’s service sector the Finance Ministry is drafting a bill on Transfer Pricing guidelines.

The Transfer Pricing regime concerns tax treatment of intra-group financing transactions. The draft bill aims to put an end to the over-pricing of intra-group invoices so that any low tax rate that may apply in one country can be exploited.

It is a bill that will harmonise Cyprus with the Organisation for Economic Co-operation and Development (OECD’s) guidelines. And even though this has not been requested by foreign authorities, Nicosia judged that it is a development that needs to be made so that Cyprus complies with international best practices and not be accused that it erodes tax bases of other countries.

Substantially, the new legislation will cover all types of transactions whose costs are over €750 thousand per year. In other words, a Group should document that the charges it has made for these transactions are correct and are the same as those that would be charged for transactions with third parties in order to avoid the phenomenon of transferring profits to countries with lower tax rates.

The relevant draft legislation has been completed and sent to the Legal Service for review.

Costas Markides, who is a member of the Institute of Certified Public Accountants of Cyprus and coordinator of the subcommittee on this, told INSIDER that the legislation drafted by the competent Ministry and more specifically by the Tax Office is definitely a step in the right direction. And that it is fully in line with transparency efforts that Cyprus has consciously adopted over the recent past years.

“Cyprus has a relatively low corporate tax rate (12.5%) and it is very important to be able to document to relevant tax authorities within and outside Europe that income received by Cypriot parent companies as well as  subsidiaries by a Group is in line with international standards of intra-group billing as defined by the OECD, ” he also said.

 

Read more:

https://in-cyprus.com/fitch-upgrades-hellenic-bank-to-b-affirms-bank-of-cyprus-at-b/

 

 

 

 

 

 

 

Top Stories

Forestry head shocked by heinous arson in Kouklia-Dora

  Director of Forestry Services Charalambos Alexandrou expressed utter shock and rage at today's criminal act against Cyprus, commenting on the mass arson causing a...

Arab League to mobilise Arab efforts to help Lebanon; Turkey ready to rebuild port

  Arab League Chief Ahmed Aboul Gheit said he would seek to mobilise Arab efforts to provide support to Lebanon after this week’s catastrophic explosion...

Backstory: Covering the Beirut blast, bruised and bloodied

  Imagine what it’s like to be flung to the floor by a gigantic explosion, dodge a falling wardrobe in your home, be cut in...

Furious Lebanese count their losses from blast, demonstration later today

  As Beirut mourns its dead and grapples with the scale of rebuilding after this week’s massive blast, some Lebanese activists planned to demonstrate in...

Lebanon donor teleconference tomorrow, under UN and French auspices

  France and the UN will be hosting a Lebanon donor teleconference tomorrow afternoon, aimed at providing fast assistance for those affected by Tuesday's tragedy....

Taste

Octopus ‘Kathisto’ (or Octopus braised in Wine)

Ingredients: 1/2 cup Greek extra virgin olive oil 2 medium onions, chopped fine 1 large octopus, about 2kg (cleaned and kept whole) 3/4 cup dry red wine 1/3 cup...

Homemade lemonade

Ingredients: 1 cup lemon juice 1 cup sugar Method: Thoroughly wash the lemons with soap and warm water. Roll each lemon with the palm of your hand, pressing...

‘Striftaria’ mini cheese pies

Ingredients 1 ½ cup milk 2 tbsps. flour 4 tsps. of butter 3 eggs, slightly beaten + 1 extra with 1 tbs. of milk for spreading 1 pack of...

Mini potato canapes baked on salt

Ingredients Serves: 12 1kg small Cypriot potatoes rock salt, as needed 250g salted butter 300ml full fat cremé frâiche 1 pot cod or salmon roe Method Prep:20min › Cook:35min › Ready in:55min Take...