On 24 January 2022, the Tax Department published a new frequently asked questions (FAQs) section on its website on transfer pricing (TP). The FAQs relate to Interpretative Circular 3, which was issued on 30 June 2017 (the "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. It also 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 on 24 January 2022 (ie, the date that the FAQs were issued), as well as loan agreements that were concluded prior to, and have not been examined by the Tax Department by, that date.

For further information on this topic please contact Alexis Christodoulou at Elias Neocleous & Co LLC by telephone (+357 25 110 110) or email ([email protected]). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.