CYPRUS Law and Practice Contributed by: Marios Palesis and Theodora Charalambous, Kinanis LLC
7.6 APA User Fees Relevant guidance regarding the fee for a taxpayer seeking an APA is expected to be issued by the tax authorities. 7.7 Duration of APA Cover The period of validity of an APA cannot exceed four years. 7.8 Retroactive Effect for APAs An APA does not apply to a tax year that has already ended before the submission of the APA. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences Failure to provide a local file or master file within 60 days upon request from the Cyprus tax authorities is penalised as follows: • EUR5,000 if submitted from 61 to 90 days after the request date; • EUR10,000 if submitted from 91 days to 120 days after the request date; and • EUR20,000 if submitted more than 120 days after the request date. The penalty for failure to submit the SIT is EUR500. 8.2 Transfer Pricing Documentation Cyprus has adopted TP documentation rules, with effect from 1 January 2022. The TP documentation rules consist of the master file and the Cyprus local file, and should be accompanied with the summary table of transactions. A master file must be prepared when the consolidated revenues of the group exceed EUR750 million. Further, a country-by-country report must be submitted for groups with revenue exceeding EUR750 million. 9. Alignment With OECD Guidelines 9.1 Alignment and Differences Although Cyprus is not a member of the OECD, in practice the Cyprus tax authorities refer to OECD materials for guidance.
• it is found that the taxpayer has not complied with substantive conditions or obligations as set out in the APA. Where the APA is recalled, it is considered as never having been issued in the first place. The APA may be cancelled by the Commissioner of Taxation during the period in which it applies if: • it is found that there has been a substantial change of the critical assumptions or conditions on which the APA was based; • it is found that the taxpayer has not complied with substantive conditions or obligations as set out in the APA; or • there is a substantial change in the tax provisions which substantially affects the APA. The Commissioner of Taxation is not allowed to can - cel the APA if it is possible to revise it (see above). However, where the APA has been cancelled, its valid - ity ceases from the date indicated in the decision-of- cancellation document. 7.2 Administration of Programmes The Cyprus tax authorities have ten months from the date of application to reach a decision on an APA. However, the Commissioner of Taxation can extend this period to 24 months. 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures Since APA provisions were recently introduced in 2022, there is not yet practice regarding co-ordination between the APA process and MAPs. 7.4 Limits on Taxpayers/Transactions Eligible for an APA There are no limits on which taxpayers or transactions are eligible for an APA. 7.5 APA Application Deadlines The law and current guidance do not provide a period during which a taxpayer must file an APA application.
57 CHAMBERS.COM
Powered by FlippingBook