Cyprus continues to expand its tax treaty network by entering into new treaties or revising existing ones in line with the latest OECD Model Tax Treaty.

Barbados

The treaty for the avoidance of double taxation between Cyprus and Barbados signed on 3 May 2017 entered into force on 11 September 2017 and applies as from 1 January 2018.

Ethiopia 

The treaty for the avoidance of double taxation between Cyprus and Ethiopia signed on 30 December 2015 entered into force on 19 October 2017 and applies as from 1 January 2018 in Cyprus and as from 8 July 2018 in Ethiopia.

United Kingdom

Cyprus and the United Kingdom signed a new treaty for the avoidance of double taxation on 22 March 2018 to replace the 1974 treaty. The new treaty is not yet in force. When in effect, a 15% withholding tax rate will apply to dividends paid out of income (including gains) derived directly or indirectly from certain immovable property by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempt from tax (other than where the dividends are paid to a pension scheme); otherwise, the rate will be 0%. Interest and royalties will be taxable only in the state of residence of the recipient.

Saudi Arabia

Cyprus and Saudi Arabia and signed a treaty for the avoidance of double taxation on 3 January 2018. The treaty is not yet in force. When in effect, the treaty provides for a 0% withholding tax rate on dividends paid to a company (other than a partnership) that holds directly or indirectly at least 25% of the capital of the payer company; otherwise, the rate will be 5%. A 0% rate will apply to interest whereas a 5% rate will apply to royalties paid for the use of, or the right to use, industrial, commercial or scientific equipment; otherwise, the rate will be 8%.

How we can help

Feel free to contact us should you wish to discuss the terms of the treaty and/or how to structure your investments through Cyprus. You can also download our Information Sheet: Cyprus Double Tax Treaties on which you can find listed all of the tax treaties signed by Cyprus.

Contact

Constantinos Markou
Director
Head of Tax Services
markou@atca.com.cy
+357 25661717