On 24 August 2026, the Tax Department of the Republic of Cyprus issued a press release announcing the reference interest rate derived from the 10-year government bond yield of Honduras (in USD) as of 31 December 2025. According to the announcement, this yield, increased by 5%, serves as the official reference rate for specific tax computations under relevant Cypriot tax legislation. The determination aligns with statutory provisions requiring the Tax Department to publish benchmark rates for cross-border financial transactions and anti-avoidance calculations. Taxpayers and advisors must apply this rate for the relevant fiscal periods involving Honduran sovereign debt instruments or related party financing arrangements.
Key Takeaways
- Official Reference Rate Published: The 10-year Honduras USD government bond yield as of 31 December 2025, plus a 5% margin, is now the legally recognized benchmark for prescribed tax purposes in Cyprus.
- Applicability to Cross-Border Transactions: This rate directly impacts transfer pricing analyses, controlled foreign company (CFC) calculations, and interest limitation rules where Honduran sovereign yields are the relevant comparator.
- Compliance Obligation for Taxpayers: Entities with exposure to Honduran government securities or using this benchmark for intra-group lending must update their tax workpapers and transfer pricing documentation to reflect the newly published rate for the 2025 tax year.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement