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Corporate Income Tax Return (T.D.4) 2018 & Transfer Pricing Requirement

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We would like to inform you that the 2018 Corporate Income Tax Return (T.D.4) template has been published by the Cyprus Tax Authorities.

Deadline
Please note that the 2018 T.D.4 needs to be submitted electronically (through Taxisnet) by the 31st of March 2020.

Failure on submission 
A penalty charge of €100 is imposed for failure to submit the 2018 T.D.4 within the deadline. 

In the cases that the tax return is requested by the Cyprus Tax Authorities (CTA) in writing, then the penalty for failure to submit within the due date is increased to €200.


It is also noted that in the 2018 T.D.4, the tax authorities have included an additional field, requesting taxpayers who deal in intra-group financing arrangements to confirm whether a Transfer Pricing Study (TPS) has been prepared in order to support the taxpayer’s position or whether the safe harbour rules were followed.

Kindly note that if a taxpayer selects to apply the safe harbour rules, then the back-to-back financing arrangement could still be reported to foreign tax authorities under the exchange of information rules.


Brief explanation of Transfer Pricing Circular
The Cyprus Tax Authorities (CTA) have issued on 30 June 2017 the Circular in relation to the Transfer Pricing Framework (the “Circular”), for companies carrying out intragroup financing activities in Cyprus.

The “Circular” is effective as from 1 July 2017.

The “Circular” applies to the following entities which are involved in back-to-back intragroup financing transactions:

  • Tax resident entities.
  • Permanent Establishments.

Back-to-back intragroup financing need to meet the following criteria in order the “Circular” to be applicable:

  • Granting of loan or cash advances to related companies.
  • The granting of loan or cash advances to be interest-bearing (or should be).
  • Financed by financial means (e.g. debentures, private loans, cash advances and bank loans).
  • Intermediary financing company is Cyprus tax resident.


Transfer Pricing Study (TPS)
TPS is the supporting document to be provided to Cyprus Tax Authorities as evidence that the transaction which took place was based on the Arm’s Length Principle. 
In case you have intra-group back-to-back financing arrangements, for which no transfer pricing study has been prepared, it is highly advisable that you should contact us in order to support the Company’s tax position.


We are at your disposal for any further information or clarification you need.




Contact persons


Leonidas Papadopoulos
(Head of Accounting)                     
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+357 22 100 192                                        

Pavlos Tsiaklides
(Head of Audit)
This email address is being protected from spambots. You need JavaScript enabled to view it.
+357 22 100 192

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