Following the introduction of the transfer pricing legislation since July 1st 2017, we wish to inform you that Nasos A. Kyriakides & Partners LLC is in a position to assist you and your clients to prepare the relevant transfer pricing studies and adhere to the new reporting obligations according to the revised tax treatment of intra-group back to back financing arrangements.
The new tax treatment concerns Cypriot and non-Cypriot tax resident companies with a permanent establishment in Cyprus which carry out group financing transactions. The term “intra-group financing transaction” refers to any activity of granting of loans or cash advances remunerated by interest to related companies, financed by financial means and instruments such as debentures, private loans, cash advances and bank loans.
For the purposes of transactions falling within this circular, it is necessary to be determined for each intra-group financing transaction whether the agreed remuneration complies with the arm’s length principle (as set out in Article 9 of the OECD Model Tax Convention on Income and on Capital).
We remain at your disposal for any further information/clarifications you may require as to the above.