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The Cyprus Parliament on June 30 approved the long-awaited amendments to the Cyprus Income Tax Law and new Regulations to introduce Transfer Pricing (TP) documentation compliance obligations (Master File, Cyprus Local File, Summary Table) for Cyprus tax resident persons, and permanent establishments of non-Cyprus tax resident persons situated in Cyprus, that engage in transactions with related parties (Controlled Transactions). A formal Advance Pricing Agreement (APA) procedure has also been introduced. Specific penalties for non-compliance with the new obligations are now in place by an amendment to the Assessment and Collection of Taxes Law. The law amendments and Regulations are effective from the tax year 2022 onwards.

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