Further to our previous newsfeeds on this, the Cyprus Tax Department issued new Frequently Asked Questions (FAQs) on its website, providing guidance on certain aspects of the Transfer Pricing Rules introduced with effect from 1 January 2022.
Below is a selection of the questions and answers appearing on the website mentioned above.
Summary Information Table
Question: When is the submission deadline for the Summary Information Table (SIT) for 2022?
Answer: The deadline for the submission of the 2022 SIT is on 30 November 2024.
Question: How can the SIT be submitted to the Tax Department?
Answer: The SIT shall be submitted only electronically through the Tax For All (TFA) Portal.
Specific Transactions and Balances
Question: Should the sale of shares and other securities, which fall under the definition of ‘titles’ as per the Income Tax Law and the related Tax Circular, between related parties be reported in the SIT and taken in to account for assessing whether the Local File threshold is exceeded?
Answer: No.
Only for this specific case, transactions shall not:
(a) be taken into account for the purposes of assessing whether the Local File threshold of is exceeded; or
(b) be reported in the SIT; or
(c) be documented in the Local File / or satisfy the minimum TP documentation (if applicable).
Question: Should Trade Receivables and Trade Payables between related parties be reported in the SIT and taken in to account for assessing whether the Local File threshold is exceeded?
Answer: No.
Such balances should not be reported in the SIT provided that the terms of such Trade Receivables and Trade Payables between related parties do not differ from those between two independent parties and as such they are not considered to be of a financing nature.
Trade Receivable and Trade Payable balances of a trading (non-financing) nature shall NOT:
(a) be taken into account for the purposes of assessing whether the Local File threshold is exceeded; or
(b) be reported in the SIT.
(c) be documented in the Local File / or satisfy the minimum TP documentation (if applicable).
Question: Do Trade Receivables or Other Receivables between related parties, which are considered to be of a financing nature have to be reported in the SIT and taken in to account for assessing whether the Local File threshold is exceeded?
Answer: Yes.
Trade Receivables or Other Receivables of a financing nature shall:
(a) be taken into account for the purposes of assessing whether the Local File threshold is exceeded; or
(b) be reported in the SIT.
(c) be documented in the Local File / or satisfy the minimum TP documentation (if applicable).
Question: What amount needs to be reported in the SIT in relation to Trade Receivables or Other Receivables between related parties, which are considered to be of a financing nature?
Answer: The maximum balance during the reported year of such Trade Receivables or Other Receivables shall be taken into account for the purpose of assessing whether the Local File threshold is exceeded and for reporting in the SIT.
