Double Tax Treaties

DOUBLE TAX TREATIES

Cyprus has established itself as one of the leading financial centres in the world. Businesses and Entrepreneurs from its region, the Balkans and Middle East, and also Russia, Ukraine, the former CIS countries, India, amongst others, use Cyprus for their International transactions and entrepreneurship. One of the main advantages is its extensive double tax treaty network. All treaties have been drafted according to the OECD model tax treaty. The treaties in conjunction with the European Union Parent- Subsidiary and Interest directives provide the business world the ideal place to contact business. As in all cases the Double tax treaties and EU directives taxation rate prevails the domestic law if the taxation is lower. Payments of dividends and interest to non residents are exempt from withholding tax in Cyprus.

Explanatory Notes:

1. 15% if recipient is a company controlling less than 25% of the voting power.
2. 15% if recipient is a company controlling less than 10% of the voting power
3. 5% if paid to a company controlling less than 50% of the voting power
4. This rate applies if the amount invested by the beneficial owner is over EUR 200.000 irrespective of the % of voting power acquired. 10% is imposed if received by a holder of at least 25% of the share capital of the paying company. Otherwise the rate is 15%.
5. 5 % if received by a company controlling at least 10% of the voting power.
6. 10% if recipient is a company, which has invested less than €100.000
7. Nil if paid to the Government or for export Guarantee.
8. Nil if paid to the Government of the other state.
9. Νil if paid to the Government of the other State or in connection with the sale οn credit of any industrial. Commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or is guaranteed from government or other governmental organization
10. Νil if paid to the Government of the other State, to a bank or a financial institution or in respect to debt obligations arising in connection with sale of property or the provision of services.
11. Nil if royalties are copyright and other literary, dramatic, musical or artistic work not including television programmes.
12. 5% on film royalties (not including films shown on television)
13. 10% literary, dramatic, musical or artistic and television royalties.
14. Nil on literary, artistic or scientific work including films.
15. 10% on payment of technical fees management fees and consultancy fees.
16. Νil if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits.
17. 10% on interest received from financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies.
18. 10% on right to use industrial. commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs , models, plans , secret formulas or processes
19. 10% if received by a company, which owns less than 25% of the capital.
20. This rate does not apply, where 25% or more of the capital of the Cypriot resident is owned directly or indirectly by the Bulgarian resident paying the royalties and the Cyprus company pays less than the normal rate of tax.
21. The treaty provides for 25%, but the domestic rate of Νil applies since it is lower than the treaty rate.
22. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid.
23. 7% if paid to a bank or similar financial institution. Νil if paid to the government.
24. The treaty provides for 15% withholding tax but the local taxation provides for 0% withholding tax.
25. Νil if paid to or is guaranteed by the government, statutory body, the Central Bank.
26. Not yet ratified.
27. 5% on film royalties, including films used for television programs.
28. No WHT for interest on deposits with banking institutions.
29. This rate applies if received by a company (excluding partnerships) that holds directly 25% of the shares. A rate of 10% applies in all other cases.
30. This rate applies if received by a company ( excluding partnership) which holds directly at least 10% of the shares for an uninterrupted period of no less than one year. 5% applies in all other cases.
31. 10% for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
32. A rate of 5% if a dividend is paid by a company in which the beneficial owner has invested less than EUR 150,000.
33. Anew treaty has been signed and is now awaiting ratification.
34. 5% withholding tax will apply if the holding is less than 10% of the share capital
35. The tax is 5% if the beneficial owner holds at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100,000. In all other cases the withholding tax rate is 15%.
36. The withholding tax rate on royalties in respect of any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience is 5%, and 10% in all other cases.
37. A rate of 15% if a dividend is paid by a company in which the beneficiary owner is a company that holds less than 10% of the capital of the company that pays the dividends.
38. Maximum of 5% will be paid on royalties that are taxed in the country were royalties are paid according to their legislation.
39. 5% on dividends were the companies that pays the dividend is resident to that country and the recipient of the dividend is resident to the country were the dividends are paid.
40. This rate applies if the recipient company (partnership is excluded) holds directly 10% of the share capital of the paying company for an uninterrupted period of at least 2 years. 5% in all other cases
41. A rate of 15% applies if received by a company controlling less than 10% of the voting power in the paying company and in all cases if received by an individual.
42. The provisions of the Parent-Subsidiary EU directive are applicable
43. The treaty is effective 1 January 2016.
44. 5% if the beneficial owner is a company (excluding partnerships) which holds directly at least 10% of the capital of the company paying the dividends. 10% in all other cases.
45. NIL if the beneficial owner is a company (excluding partnerships) which holds directly at least at least 10% on the capital of the company paying the dividends. 5% in all other cases.
46. 15% if received by an individual or received by a company directly holding less than 10% of the share capital of the company paying the dividends.

* Payments of dividends and interest to non-residents are exempt from withholding tax in Cyprus. Royalties granted for use outside of Cyprus are also free of withholding tax in Cyprus.

* * 10% in the case of royalties granted for use within the Republic.5% on film and TV rights.

* * * Azerbaitzian, Kyrgyztan, Tajikistan, and Uzbekistan apply the USSR/Cyprus treaty. The rates shown are those of the treaty Cyprus/USSR.

* * * * Serbia, Montenegro apply the Yugoslavia/Cyprus treaty.
Please contact a member of our staff for further information and/or clarifications.