Cyprus has applied transfer pricing rules aligned with the OECD Transfer Pricing Guidelines since 2022. If your company transacts with connected parties — a parent, a subsidiary, a company under common control, or its own directors and shareholders — those transactions must be priced as they would be between independent parties, and above certain sizes they must be documented.
This affects far more companies than it first appears to. Intra-group loans, management fees, guarantees, licensing arrangements and the recharge of shared costs are all controlled transactions.
What the rules require
- Arm's length pricing for every controlled transaction, whatever its size. This obligation has no threshold.
- A Summary Information Table, filed with the tax return by every taxpayer with controlled transactions — again with no threshold. This is the obligation most often overlooked.
- A Local File, where controlled transactions in a category exceed the annual threshold.
- A Master File, where the group falls within scope.
Local File thresholds from the 2026 tax year
The thresholds were raised with effect from the 2026 tax year:
- €10 million — financial transactions
- €5 million — goods
- €2.5 million — other categories, including services, royalties and intangibles
They are measured per category, per year, on the aggregate of controlled transactions in that category. Falling below them removes the Local File requirement — it does not remove the arm's length obligation, and it does not remove the Summary Information Table.
If you are below the thresholds
Being under the Local File thresholds is not the same as having nothing to do, and this is where most of the misunderstanding sits. Three obligations survive:
- Arm's length pricing, which never had a threshold in the first place.
- The Summary Information Table, filed with the tax return.
- Minimum transfer pricing documentation. Under Circular 6/2023, taxpayers exempt from the Local File must still keep documentation supporting their controlled transactions — a functional analysis, the resulting characterisation of the entity, the transfer pricing method chosen, and support for the pricing itself.
The circular also makes simplification measures available to exempt taxpayers for three kinds of transaction: back-to-back financing, financing received or provided, and low value-adding services. Where they apply, they substantially reduce the work — but they have to be elected and applied correctly, and they are not automatic.
For most owner-managed companies this is the practical question: not whether a full Local File is needed, but what the lighter regime actually requires and whether a simplification measure is available. That is a conversation worth having before the year end rather than after it.
How we help
- Identifying and categorising your controlled transactions, which is where most of the difficulty actually lies
- Preparing and filing the Summary Information Table
- Reviewing intra-group arrangements before they are put in place, rather than defending them afterwards
- Local File preparation and review
- Reviewing transfer pricing documentation prepared elsewhere in a group, for consistency with the Cyprus position
Where we work with specialists
Benchmarking a controlled transaction means testing it against comparable dealings between independent parties, which requires access to commercial comparables databases. Where a benchmarking study is needed, we work with specialist transfer pricing providers and remain responsible to you for the engagement throughout. We say so plainly because you are entitled to know who is doing what.
If we are also your auditor
Where we audit your financial statements, professional independence rules limit the transfer pricing work we can take on for you — a position we advised on would feed into a tax charge we then audit. We will tell you at the outset what we can do and what needs to sit with someone else. That conversation is better had at the start than at the year end.
Thresholds and requirements described as at August 2026 and stated in general terms; they are not advice on your circumstances. Transfer pricing obligations turn on the facts of each arrangement — please speak to us before acting.