On 24 January 2022, the Cyprus Tax Department published a new “Frequently Asked Questions (FAQs)” section on its website on Transfer Pricing (TP). The FAQs relate to the Interpretative Circular 3 issued on 30 June 2017 (Back-to-Back Circular). The Back-to-Back Circular applies to Cyprus tax resident companies and permanent establishments of foreign companies conducting intra-group back-to-back financing transactions and sets out requirements for the TP analysis of such transactions.
The answers to the FAQs are applicable to all transactions that fall within the scope of the Back-to-Back Circular and relate to loan agreements concluded as at the date of the issue of the FAQs and thereof (i.e., 24/01/2022), as well as to those loan agreements which were concluded prior to that date and have not been examined by the Tax Department by that date.
