CYPRUS Law and Practice Contributed by: Marios Palesis and Theodora Charalambous, Kinanis LLC
12. Co-Ordination With Customs Valuation 12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation Cyprus does not require co-ordination between TP and customs valuation. 13. Controversy Process 13.1 Options and Requirements in Transfer Pricing Controversies The relevant legislation in Cyprus was intro - duced in 2022; therefore, there is no (or, at most, a limited) TP controversy process. A taxpayer can challenge the results of a TP audit through the tax tribunal. The taxpayer is not obliged to pay the tax before applying to court. 14. Judicial Precedent 14.1 Judicial Precedent on Transfer Pricing Cyprus TP legislation was introduced in 2022; therefore, judicial precedent on TP in Cyprus does not yet exist. As such, UK, EU or other common law jurisdiction judicial precedent may be used. 14.2 Significant Court Rulings As TP legislation was only recently introduced in 2022, there are no court rulings yet.
will be reportable under the DAC6 legislation in Cyprus, under Hallmark E.1. 11.2 Rules on Savings Arising From Operating in the Jurisdiction Cyprus does not have specific rules governing savings that arise from operating in Cyprus. 11.3 Unique Transfer Pricing Rules or Practices Cyprus does not have any notable unique rules or practices applicable in the TP context. 11.4 Financial Transactions Cyprus follows Chapter X of the OECD TP Guidelines as a reference for financing transac - tions. However, in addition to this, the Cyprus tax authorities have published three safe harbour rates that taxpayers may choose to apply for financing transactions. These apply to compa - nies that do not exceed the EUR5 million thresh - old in aggregate for financing transactions. The safe harbour rates cover the following: • the provision of loans out of own capital; • the provision of loans funded out of financial means; and • the receiving of loans. Furthermore, the Cyprus tax authorities have issued a Circular specifying that the only accept - ed method for financing transactions is the CUP method. Any other method requires explicit pre- approval to be used.
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