The Cyprus Tax Department requires from auditors and tax advisors to submit a Transfer Pricing declaration of quality assurance review relating to the Cyprus Local Files, which should be updated annually, and the Summary Information Table (SIT).
The specific declaration should include the following:
- Confirmation as to the quality assurance review of the local file has been completed;
- The results of the local file and indicate whether these results meet the requirements of not for each category included in the summary information table;
- Executed by an auditor/tax advisor who is a member of ICPAC and who undertook the quality assurance review of the local file;
- Submitted in Greek language together with the SIT.
The Tax Commissioner will undertake thorough inspections of the information documented in both the SIT and the Cyprus Local file.
The deadline for the submission of the SIT for the year 2022 is by 30 November 2024 and the deadline for the submission of the 2023 SIT is by 31 March 2025.
The SIT is a new transfer pricing reporting obligation for taxpayers involved in transactions with related parties, namely controlled transactions. From 2022 tax year onwards, taxpayers engaged in controlled transactions, irrespective of the value and nature of the transaction, are required to report the specific transactions through their SIT which is submitted through the TFA portal.
The SIT should include the following:
- Legal name of the counterparty
- Tax residency of the counterparty
- Tax Identification Number of the counterparty
- Type and value for each transaction
- Documentation method used to support each transaction
The penalty for non-submission of the SIT is €500 per return and the penalty for the non-preparation of a local file varies from €5.000 to €20.000.