Transfer pricing | TechIsland

As of January 1, 2022, transfer pricing documentation requirements apply to Cyprus tax resident persons and PEs of non-Cyprus tax residents engaging in controlled transactions (domestic or cross-border). Obligations include a Master File (for qualifying MNE parents), Cyprus Local File (subject to revised thresholds below), and Summary Table; a formal APA procedure exists, with penalties for noncompliance.

Transfer Pricing Documentation

Cyprus tax residents and Cyprus PEs engaging in controlled transactions must prepare an annual Transfer Pricing Documentation File (Master File and/or Local File as applicable), following OECD Guidelines (BEPS Action 13). Contents mirror OECD standards for organizational structure, policies, and transaction analyses.

Exemptions

Master File: Required only for ultimate or surrogate parents of MNE groups with €750m+ consolidated revenue under CbC reporting; others exempt.

Local File: Exempt if aggregate annual controlled transactions per category fall below 2026 thresholds: €5m (goods), €10m (financing), €2.5m (services/IP/royalties/others)—up from pre-2026 €1m/€1m/€5m limits. Simplified documentation (e.g., functional analysis, pricing justification) suffices below thresholds.

Category	Pre-2026 Threshold (€m)	2026 Threshold (€m)
Goods	1	5
Financing	5	10
Services/IP	1	2.5

Quality Review

A Cyprus ICPAC-certified accountant (or approved body) must quality-review the Local File if prepared. Files may be electronic/paper, preferably English; Greek translation possible on Tax Authority request. Prepare/review files annually by Income Tax Return deadline; retain per general rules, submit within 60 days of audit request. Late/non-filing incurs penalties. Annual updates are required, addressing market changes or events impacting analyses.

Summary Table

All taxpayers with controlled transactions must file an electronic Summary Table (counterparties, TICs, values by category) with their Income Tax Return.

APA Procedure

Cyprus residents or Cyprus PEs may request unilateral APAs for current/future transactions; Tax Authorities review and approve/reject, covering up to specified periods under set conditions.