Cyprus News: Submission of Summary Table of Controlled Transactions

The Cyprus Tax Department has issued an announcement regarding the submission of the Summary Information Table of Controlled Transactions (hereinafter “SIT”) for the year 2022.

The SIT is a mandatory form that must be submitted to the Tax Department annually. It provides an overview of the taxpayer’s transactions with related parties over a tax year, including identity and tax residency details of the counterparties, the types of intercompany transactions conducted (e.g., services, intangibles, financial transactions, sale of goods and other), and the amounts involved in each transaction category.

Cypriot taxpayers are required to file the SIT by the submission deadline of the tax return for the specific fiscal year, that is, normally, by 15 months following the end of the relevant tax year.

In respect of the year 2022, for entities that have an obligation to submit a SIT, the deadline has been extended from 31 March 2024 to 30 November 2024. Failure to submit the SIT will result in a penalty of EUR 500.

Apart from the SIT, taxpayers must be able to substantiate all related party or intercompany transactions with appropriate transfer pricing documentation depending on the arm’s length value of the category of transactions. Cypriot taxpayers involved in controlled transactions falling within the ambit of Article 33 of the Income Tax Law with an aggregate arm’s length value exceeding the stated annual thresholds in any of the following five transaction categories, as defined in the SIT, are required to prepare a Cyprus local file:

• Sale/purchase of goods
• Provision/receipt of services
• Financing transactions
• Receipt/payment of IP licensing/royalties
• Other

Based on the announcement issued by the Tax Department, the thresholds are as follows:

• €5.000.000 for controlled transactions falling under the category “Financing”
• €1.000.000 for all other categories of connected transactions
(i.e., “Goods,” “Services,” “Royalties and Other Intangibles” and “Other”)

Taxpayers with controlled transactions that do not exceed the stated thresholds and are thus exempted from the obligation to be documented in a Cyprus Local File, must adhere to Simplified Transfer Pricing documentation requirements.

Starting from 27 May 2024, the SIT must be submitted exclusively through the Tax For All (TFA) portal.