MDM Cyprus | Double Tax Treaties
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Double Tax Treaties

 Cyprus double tax treaties

 

The following is a summary of the withholding rates provided by the treaties for the avoidance of double taxation entered into by Cyprus:

 

 

PAID FROM CYPRUS RECEIVED IN CYPRUS
Dividends % Interest % Royalties % Dividends % Interest % Royalties %
Non – Treaty countries 0 (1) 0 (1) 0 (1, 2) n/a n/a n/a
1 Armenia(20) 0 0 0 0 0 0
2 Austria 10 0 0 10 0 0
3 Belarus 5 (18) 5 5 5 (18) 5 5
4 Belgium 10 (8) 10 (6, 19) 0 10 (8) 10 (6, 19) 0
5 Bulgaria 5 (23) 7 (6) 10 5 (23) 7 (6, 24) 10 (24)
6 Canada 15 15 (5) 10 (6) 15 15 (4) 10 (5)
7 China 10 10 10 10 10 10
8 Czech Republic 0 (30) 0 0 (31) 0 (30) 0 0 (31)
9 Denmark 10 (8) 10 (6) 0 10 (8) 10 (6) 0
10 Egypt 15 15 10 15 15 10
11 France 10 (9) 10 (10) 0 (3) 10 (9) 10 (10) 0 (3)
12 Germany 10 (8) 10(6) 0 (3) 10 (8) 10 (6) 0 (3)
13 Greece 25 10 0  (12) 25 (11) 10 0 (12)
14 Hungary 0 10 (6) 0 5 (8) 10 (6) 0
15 India 10 (9) 10 (10) 10 (9) 10 (9) 10 (10) 15 (15)
16 Ireland 0 0 0 0 0 0 (12)
17 Italy 0 10 15 15 10 0
18 Kuwait 10 10 (6) 10 10 10 (6) 5 (7)
19 Kyrgyzstan(20) 0 0 0 0 0 0
20 Lebanon 5 5 5 5 5 0
21 Malta 15 10 0 0 10 10
22 Mauritius 0 0 0 0 0 0
23 Moldova (27) 5 (28) 5 5 5 (28) 5 5
24 Montenegro (26) 10 10 10 10 10 10
25 Norway 0 0 0 0 (13) 0 0
26 Poland 10 10 (6) 5 10 10 (6) 5
27 Romania 10 10 (6) 5 (7) 10 10 (6) 5 (7)
28 Russia 5 (17) 0 0 5 (17) 0 0
29 San Marino 0 0 0 0 0 0
30 Serbia (26) 10 10 10 10 10 10
31 Seychelles 0 0 5 0 0 5
32 Singapore 0 10 (6, 25) 10 0 10 (6,25) 10
33 Slovakia 10 10 (6) 5 (7) 10 10 (6) 5 (7)
34 Slovenia (26) 10 10 10 10 10 10
35 South Africa 0 0 0 0 0 0
36 Sweden 5 (8) 10 (6) 0 5 (8) 10 (6) 0
37 Syria 0(8) 10 10 0 (8) 10 (4) 10
38 Tadzhikistan (20) 0 0 0 0 0 0
39 Thailand 10 15 (21) 5 (22) 10 15 (21) 5 (22)
40 Ukraine (20) 0 0 0 0 0 0
41 United Kingdom 0 10 0 (3) 15 (14) 10 0 (3)
42 United Stattes 0 10 (10) 0 5 (9) 10 (10) 0

 

 

Notes

1.    Under Cyprus legislation there is no withholding tax on dividends, interests and royalties paid to non-residents of Cyprus.

2.    In case where royalties are earned on rights used within Cyprus there is withholding tax of 10%.

3.    5% on film and TV royalties.

4.    0 if paid to a Government or for export guarantee.

5.    0 on literary, dramatic, musical or artistic work.

6.    0 if paid to the Government of the other state.

7.    This rate applies for patents, trademarks, designs or models, plans, secret formulas or processes, or any industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.

8.    15% if received by a company controlling less than 25% of the voting power or by an individual.

9.    15% if received by a person controlling less than 10% of the voting power.

10.  0 if paid to a Government bank or financial institution.

11.  The treaty provides for withholding taxes on dividends but Greece does not impose any withholding tax in accordance with its own legislation.

12.  5% on film royalties (apart from films broadcasted on television).

13.  5% if received by a person controlling less than 50% of the voting power.

14.  This rate applies to individual shareholders regardless of their percentage of shareholding. Companies controlling less than 10% of the voting shares are also entitled to this rate.

15.  10% for payments of a technical, managerial or consulting nature.

16.  Treaty rate 15% therefore restricted to Cyprus legislation rate.

17.  10% if dividend paid by a company in which the beneficial owner has invested less than €100.000.

18.  If investment is less than €200.000, dividends are subject to 15% withholding tax which is reduced to 10% if the recipient company controls 25% or more of the paying company.

19.  No withholding tax for interest on deposits with banking institutions.

20.  Armenia, Kyrgyzstan, Tadzhikistan and Ukraine apply the USSR/Cyprus treaty.

21.  10% on interest received by a financial institution or when it relates to sale on credit of any industrial, commercial or scientific equipment or of merchandise.

22.  This rate applies for any copyright of literary, dramatic, musical, artistic or scientific work. 10% rate applies for industrial, commercial or scientific equipment. 15% rate applies for patents, trademarks, designs or models, plans, secret formulae or processes.

23.  This rate applies to companies holding directly at least 25% of the share capital of the company paying the dividend. In all other cases the withholding tax is 10%.

24.  This rate does not apply if the payment is made to a Cyprus international business entity by a resident of Bulgaria owning directly or indirectly at least 25% of the share capital of the Cyprus entity.

25.  7% if paid to bank or financial institution.

26.  Montenegro, Serbia and Slovenia apply the Yugoslavia/Cyprus treaty.

27.  The treaty is effective from 1 January 2009.

28.  This rate applies if received by a company (excluding partnership) which holds directly 25% of the shares. 10% rate applies in all other cases.

29.  A treaty with Qatar has been signed but has not been ratified yet.

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, trade mark, 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.

 

Cyprus Tax Sparing Provisions
 
A tax-sparing provision has the effect that if tax is ‘spared’ ie exempted in Cyprus, then it is credited against an investor’s tax liability in his home country (the treaty counterpart) as if it had actually been paid in Cyprus. At the time of writing, there are tax-sparing provisions in the treaties with the following countries:

 Canada Czech Republic
 Denmark
 Federal Republic of Germany
 Greece
 IndiaIreland
 Italy
 Malta
 Slovakia
 Sweden
 Syria
 United Kingdom Yugoslavia

The taxes all or partly spared are as follows:

 Tax on interest paid on loans for economic development in Cyprus (Canada, Denmark, Germany, France and UK).

 Tax relieved because of deductions in respect of investment in Cyprus (Canada, UK).

 Tax on interest or profits which is unpaid because of tax incentives, reliefs or exemptions in Cyprus (Czech Republic, Greece, Ireland, Romania, Slovakia, Yugoslavia).

 Tax not withheld on dividends (15%) if the exemption is given for the purposes of economic development in Cyprus (Denmark, Germany, France).