Cyprus Tax Department has published a new circular regarding detailed transfer pricing rules which came into force on July 1, 2017. The new rules replaced the existing rules to determine the tax base of the “back-to-back” intra-group loan on the basis of a minimum margin.
Arm’s length principle has been included in Article 33 of the Income Tax Law (ITL) of 2002, which defines the concept of related parties as well. The new rules are still based on the arm’s length test, and the scope of intra-group transaction is also clarified. As regards comparability test, two issues should be taken into consideration:
According to the circular, transfer pricing analysis should be carried under the "transfer pricing expert" while the qualification is not defined. By submitting to the Tax Department, the analysis is required to cover several issues, including the general description of market conditions, the accurate scope of transactions concerned, a list of comparable transactions selected, etc.
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):
What the Boardroom needs to know about Tax today
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How to run VCA in 2018? - 3 Practical Case Studies
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