"On 30 June 2017, the Cyprus Tax Department issued an interpretative circular relating to the revised tax treatment of intra-group financing arrangements which apply from 1 July 2017. The circular follows the application of the arm’s length principle of the OECD Transfer Pricing Guidelines.
The Cyprus Tax Department announced earlier this year that the application of the pre-agreed minimum profit margins (of 0,125% to 0,35%) for ‘back-to-back loans’ will be terminated as at 30 June 2017. The new framework laid out in the circular will apply to these and certain other financing arrangements going forward."
HLBI International analyzed the main provisions of the circular. To read more, click HERE.