Cyprus Transfer Pricing Documentation Requirements
Cyprus requires a Master File and Local File where controlled transactions exceed a per-category threshold, with minimum documentation below it, and applies a graduated penalty geared to how late the documentation is provided. Simplification rules give fixed returns for qualifying financing and service transactions.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
Master File Required | Group consolidated revenue > EUR 750m | By tax return due date | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 60 days. | EN / EL | Yes (EUR 5,000 / 10,000 / 20,000 by length of delay) |
Local File Required | Controlled transactions per category > EUR 750,000 (EUR 5m for financing from tax year 2022) | By tax return due date | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 60 days. | EN / EL | Yes (EUR 5,000 / 10,000 / 20,000 by length of delay) |
TP documentation Minimum documentation
Required | Controlled transactions below the per-category threshold | By tax return due date | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 60 days. | EN / EL | Minimum documentation requirement |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
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Scope of the documentation obligation
From 2022, a Cypriot taxpayer must prepare a Local File where the cumulative amount of controlled transactions exceeds the per-category threshold, applied separately to goods, services, intangibles, financial transactions, and other categories. The threshold was historically EUR 750,000 per category, raised to EUR 5 million for financing transactions for tax years from 2022 under a later announcement. The Master File applies to groups with consolidated revenue above EUR 750 million. Where controlled transactions fall below the per-category threshold, a minimum documentation requirement applies instead, so the Local File and the minimum documentation are two levels of a single regime rather than parallel reports. Documentation is produced within 60 days of a request.
Distinctive features of the Cypriot regime
Two features distinguish the Cypriot regime. The first is the graduated penalty, which rises with the length of the delay rather than applying as a single amount: EUR 5,000 where the file is not provided within 60 days of a request, EUR 10,000 within 90 days, and EUR 20,000 within 120 days, applied to the Master File and Local File alike. The second is the set of simplification measures for financing and services that fall below the documentation threshold. Financing provided to connected persons and funded by debt may rely on a minimum before-tax return of 2.5 percent, equity-funded financing on a return tied to the relevant government bond yield plus a margin, and qualifying low-value services on a fixed mark-up, each removing the need for a full benchmarking exercise.
Benchmarking and comparables
No specific guidance has been issued on comparables, but pan-European benchmarking studies are treated as sufficient in practice. Multi-year analysis over three years is accepted. A benchmarking study may be used for the following two financial years, with the financial data updated annually and the comparability and independence of the final set re-examined each year. The limitation period is six years from the end of the year of assessment, extending to twelve years in cases of fraud or wilful default.
Frequently asked questions
How does the Cypriot documentation penalty escalate?
It rises with the delay: EUR 5,000 if the file is not provided within 60 days of a request, EUR 10,000 within 90 days, and EUR 20,000 within 120 days, applied to the Master File and Local File alike.
What applies below the Cypriot Local File threshold?
A minimum documentation requirement applies where controlled transactions fall below the per-category threshold, alongside simplification measures giving fixed returns for qualifying financing and low-value service transactions.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.