Glossary

The words of the trade as this workbench uses them. Hover any dotted term on another page for the same.

Local File: The entity-level transfer pricing documentation: its controlled transactions, the analysis and the financial information (OECD Chapter V, Annex II; Cyprus ITL s.33).
Master File: The group-level documentation: organisation, business, intangibles, financing and policies (OECD Chapter V, Annex I). In Cyprus, kept by the Ultimate or Surrogate Parent Entity (ITL s.33(9)(β)).
Summary Table: The Summary Information Table, for short.
Summary Information Table: The Cyprus table of the year's controlled transactions, filed with the income tax return through TFA, whatever the value — with the Tax Department's exclusions, such as tonnage tax both sides and the payer's interest-free balance.
Interquartile range: The middle half of the comparables' results: from the lower quartile to the upper quartile. A result inside it is generally taken as arm's length (OECD 3.57, 3.60–3.62).
Net cost plus: Operating profit over total costs. The usual indicator for a service provider.
Operating margin: Operating profit over sales. The usual indicator for a distributor.
TNMM: Transactional net margin method: tests the net profit of one party (the tested party) against comparable independent companies.
CUP: Comparable uncontrolled price: compares the price itself with prices between independent parties. The Tax Department's preferred method for back-to-back financing (Circular 7/2023).
DEMPE: Development, enhancement, maintenance, protection and exploitation: the functions that decide who earns the return on an intangible, beyond its legal owner (OECD Chapter VI).
Safe harbour: A rate the Tax Department accepts without a benchmarking study, for categories under the threshold: Circular 6/2023, revised by 5/2026 from tax year 2026.
Tested party: The party whose result is tested against the comparables: usually the less complex one.
Limited-risk distributor: A distributor that sells but leaves inventory and market risk with its principal, and so earns a low but stable margin. A loss is a flag.
Content hash: A fingerprint of exactly what was signed. Change anything an item rests on and the fingerprint changes, so the sign-off no longer counts.