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 tax - payer 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 is not applicable to a tax year that has lapsed before the time of submission of the APA. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences Failure to provide a local file or master file with - in 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 docu - mentation rules consist of the master file and the Cyprus local file, and should be accompanied with the summary table of transactions. A mas - ter file must be prepared when the consolidated revenues of the group exceed EUR750 million. Further, a country-by-country report must be
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 condi - tions 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 provi - sions which substantially affects the APA. The Commissioner of Taxation is not allowed to cancel the APA if it is possible to revise it (see above). However, where the APA has been can - celled, its validity ceases from the date indicated in the decision-of-cancellation document. 7.2 Administration of Programmes The Cyprus tax authorities have ten months to reach a decision on an APA, from the day of application. 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 trans - actions 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.
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