IP Advisory
Transfer Pricing
Intercompany pricing, local file preparation and valuation coordination.
What we do
We write the file that supports what your group entities charge each other. Functional analysis, benchmarking against comparable independent arrangements, the Cyprus local file, and the intercompany agreements themselves, drafted to describe the arrangement that is actually running.
The arrangements are usually real and usually undocumented. A parent charges a management fee, one entity lends to another, a licence lets an operating company use the group's software, and nobody has written down why the rate is what it is. The work is to establish positions that hold, record them while the facts are current, and keep them consistent in every jurisdiction that will read them.
What you get
- Functional analysis: which entity performs which functions, holds which assets and bears which risks
- The right pricing method selected and applied for each category of transaction
- A benchmarking study against comparable independent arrangements
- The Cyprus local file, and coordination with the group master file where one exists
- Intercompany agreements drafted to match the arrangement in place, including licensing, services and intragroup financing
- Income attribution where the intellectual property regime applies to part of a revenue stream
- Independent valuation coordinated where an intangible moves between related parties
- Intercompany financing terms reviewed, including rates and exposure to the ATAD interest limitation
- An annual refresh as the group's functions and flows change
How it works
The 2026 thresholds decide the shape of the engagement, so we check them first. A local file is required where controlled transactions in a category exceed 5 million euro for goods, 10 million for financing and 2.5 million for other categories. Below those lines pricing still has to be defensible, and the documentation burden is lighter.
Timing does more work than most groups expect. A file written when the arrangement begins and refreshed each year carries weight. One assembled after a query arrives reads as retrospective.
We describe what the entities actually do. An analysis written to reach a preferred answer is worse than none, because it contradicts the evidence sitting in the same company's contracts and emails. Where the facts point somewhere unwelcome we say so, and then we look at changing the facts rather than the description.
Working with us
Four steps, and the first one is a conversation
A call
What flows between the entities, in what amounts, and what has been documented so far. No charge for it.
A proposal in writing
Fixed fees, not estimates, scoped to the categories that actually cross a threshold.
You accept
Engagement letter signed, then onboarding. Neither takes long.
The file exists before it is needed
Analysis, benchmarking and agreements in place while the facts are current, and refreshed each year rather than rebuilt under a deadline.
Common questions
Do we need a local file at all?
Only where controlled transactions in a category pass the threshold: 5 million euro for goods, 10 million for financing, 2.5 million for other categories. Groups below them still need pricing they can defend, and the answer is a shorter piece of work. Establishing which side of the line you are on is part of the first conversation.
We already have a group master file. Is that enough?
Not on its own. The master file describes the group; the Cyprus local file describes what this company does and why its prices are what they are. We prepare the local file and make sure the two do not contradict each other, which is a more common problem than either being missing.
Our agreements are old. Does that matter?
It usually does. Intercompany contracts often describe an arrangement that stopped being accurate years ago, and the gap between the paperwork and the practice is the first thing an examiner finds. We align the two, in whichever direction makes commercial sense.
Is a price that works in Cyprus safe everywhere?
No. A position defensible here can still attract an adjustment on the other side, and a one sided analysis relocates the exposure rather than removing it. We prepare the Cyprus position and set out how it reads from the counterparty side, so your advisers there are working from the same numbers.
What follows
Pricing changes as the group does, so the file is reviewed each year alongside the accounts. Accounting and tax compliance carries that cycle.
Where the functional analysis shows decisions being taken somewhere other than where the profit sits, economic substance is where that gets fixed.
| Standard applied | Arm's length principle, tested by functional and comparability analysis |
|---|---|
| Common Cyprus triggers | Intercompany financing, IP licensing, management fees, cost sharing |
| IP Box interaction | Income attribution to the qualifying asset is a transfer pricing exercise |
| Valuation | Required where intangibles are transferred between related parties |
| Local file thresholds from 2026 | Goods 5m, financing 10m, other categories 2.5m |
| Timing | Contemporaneous documentation, prepared when the transaction occurs |
| Consequence of absence | Adjustment risk in Cyprus and in the counterparty jurisdiction |
Also in IP Advisory
- Cyprus IP Box StructuringQualification analysis, nexus modelling and the deduction position under BEPS Action 5.
- IP Holding CompanyOwnership, licensing and assignment of intellectual property through a Cyprus entity.
- IP MigrationMoving existing intellectual property into Cyprus with valuation and assignment support.
Find out whether Cyprus fits your plans
It starts with three questions: where your revenue comes from, what you own, and where you are tax resident. From there, the conversation is about what you are building and where you want to take it. After the call, you receive a written proposal covering the recommended structure, the implementation roadmap, and a fixed fee quote.