DOUBLE TAX TREATY NETWORK
For the avoidance of double taxation, Cyprus concluded over 30 double tax treaties, covering 42 countries. The majority of these treaties follow the OECD (Organisation for Economic Cooperation and Development) model against harmful tax practice.
It is important to note that a company will be entitled to tax credit under any relevant Double Tax Treaties as well as to unilateral tax credit in respect of any tax paid by the company in any foreign country with which Cyprus does not have a Double Tax Treaty. Both the credit under the relevant Double Tax Treaties as well as the unilateral tax credit will equally apply in respect of Corporation Tax and / or to Defence Fund contribution. It follows that if the company receives any dividends which under the New Tax Regime might be taxable in Cyprus or it earns any interest from board or any rentals from outside Cyprus and on any such type of income it pays any tax outside Cyprus the amount of such tax paid shall be deducted from any Cyprus tax which would have otherwise been payable on such type of income.
TREATIES FOR THE AVOIDANCE OF DOUBLE TAXATION, TAX TREATMENT OF DIVIDENDS, INTERESTS AND ROYALTIES
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Paid from countries shown below to residents of Cyprus |
Paid from Cyprus to residents of the countries shown below |
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| 1 | Austria | 10% | nil | nil | 10% | nil | nil | ||
| 2 | Belarus | 5%(i) | 5% | 5% | 5%(i) | 5% | 5% | ||
| 3 | Belgium | 10%(2) | 10% | m | nil | 10%(2) | 10% | (3) | nil |
| 4 | Bulgaria | 5%w | 7%(5)(6) | 10%(6) | 5%(4) | 7%(5) | 10% | ||
| 5 | Canada | 15% | 15% | (3) | 10%(7) | nil | 15% | (3) | 10%(7) |
| 6 | China | 10% | 10% | 10% | 10% | 10% | 10% | ||
| 7 | CIS*** | nil | nil | nil | nil | nil | nil | ||
| 8 | Czech Republic | 10% | 10% | (3) | 5%(8) | nil | 10% | (3) | 5%(s) |
| 9 | Denmark | 10%(2) | 10% | w | nil | 10%(2) | 10% | (3) | nil |
| 10 | Egypt | 15% | 15% | 10% | 15% | 15% | 10% | ||
| 11 | France | 10%(9) | 10% | w | nil(io) | nil | 10% | W | nil(io) |
| 12 | Germany | 15%(ii) | 10% | w | nil(io) | nil | 10% | (3) | nil(io) |
| 13 | Greece | 25% | 10% | nil(12) | 25% | 10% | nil(12) | ||
| 14 | Hungary | 5%(13) | 10% | w | nil | nil | 10% | (3) | nil |
| 15 | India | 10%(9) | 10% | (3) | 15% | 10%(9) | 10% | (3) | 15% |
| 16 | Ireland | nil | nil | nil(12) | nil | nil | nil(12) | ||
| 17 | Italy | 15% | 10% | nil | nil | 10% | nil | ||
| 18 | Kuwait | 10% | 10% | w | 5%(8) | nil | 10% | (3) | 5%(8) |
| 19 | Malta | nil | 10% | (3) | 10% | 15% | 10% | (3) | 10% |
| 20 | Mauritius | nil | nil | nil | nil | nil | nil | ||
| 21 | Norway | 5%(14) | nil(is) | nil | nil | 25% | (16) | nil | |
| 22 | Poland | 10% | 10% | (3) | 5% | 10% | 10% | W | 5% |
| 23 | Romania | 10% | 10% | (3) | 5%(s) | 10% | 10% | (3) | 5%(8) |
| 24 | Russia | 5%(17) | nil | nil | 5%(17) | nil | nil | ||
| 25 | Singapore | nil | 7%(is) | 10% | nil | 7%(is) | 10% | ||
| 26 | Slovakia | 10% | 10% | (3) | 5%m | nil | 10% | (3) | 5%(8) |
| 27 | Slovenia | 10% | 10% | 10% | nil | 10% | 10% | ||
| 28 | South Africa | nil | nil | nil | nil | nil | nil | ||
| 29 | Sweden | 5%(13) | 10% | (3) | nil | 5%(13) | 10% | W | nil |
| 30 | Syria | 15%(19) | 10% | (3) | 10%(20) | 15%(19) | 10% | W | 10%(20) |
| 31 | Thailand | 10% | 10% | (21) | 5%(22) | 10% | 10% | (21) | 5%(22) |
| 32 | UK | 15%(23) | 10% | nil(10) | nil | 10% | nil(io) | ||
| 33 | USA | 5%(24) | 10% | (3) | nil | nil | 10% | (3) | nil |
| 34 | Yugoslavia | 10% | 10% | 10% | nil | 10% | 10% | ||
| 35 | All other countries | (12) | (12) | (12) | 0-40% (i6) | 0-40% (16) | 10% (25 | ||
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ll the treaties refer to those which have been ratified. There are 32 treaties covering 40 countries. The numbers in the brackets refer to the explanatory notes here below.
** Under Cyprus tax law, dividends paid to non-resident companies are not subject to withholding tax.
*** Includes Armenia, Azerbaijan, Kyrgyzstan, Moldova, Tajikistan, Ukraine, Uzbekistan but excludes Belarus, Kazakhstan, Russia and Turkmenistan
Explanatory Notes
(1) 5% of the gross amount if the beneficial owner has a holding in the share capital of the paying company of at least ECU200.000; 10% if the beneficial owner holds directly at least 25% of the share capital of the paying company;15% in all other cases.
(2) 10% of the gross amount if recipient is a company with at least 25% direct (also indirect in the case of Belgium) share interest; 15% in all other cases.
(3) Subject to certain exemptions.
(4) 5% if beneficial owner is a company which holds directly at least 25% of the capital of the company paying the dividends; 10% in all other cases.
(5) Nil if interest is paid or guaranteed by the government of the other state or a statutory body thereof or to the central bank of the other state.
(6) These rates shall not apply if at least 25% of the capital of the Cypriot resident is owned directly or indirectly by the Bulgarian resident (either alone or with other related persons) that is paying the interest or royalties, except when the resident of Cyprus is not liable to tax which is lower than the usual tax rate.
(7) Nil if royalties are copyright and other literary
Areti Charidemou & Associates LLC Law Firm
