KPMG: Minimum Profit Margins to Be Abolished

In accordance with a letter issued by the Cyprus Tax Department to the Institute of Certified Public Accountants of Cyprus, the guidance as to the minimum profit margins the CTD would be willing to accept in back-to-back loan transactions will be abolished as of July 1, 2017. From then onwards, all related-party financing transactions will have to be supported by Transfer Pricing Studies. Such TP studies will be required both for the issuing of tax rulings and for corporate tax calculations and will be prepared by independent experts based on the relevant OECD transfer pricing guidelines.