13 Dec, 2013

Double Taxation Avoidance Agreements

Categories: Uncategorized


Double tax treaty network of Cyprus

Cyprus has an extensive network of Double Tax Treaties (DTTs), with quite a few more currently under negotiations. These treaties ensure that dividend and interest payments, made to/from Cypriot companies by foreign subsidiaries/debtors, are subject to minimum or no withholding taxation in the remitting country.

By implementing efficiently Double Tax Treaties, withholding tax credit can be obtained, e.g. on payments to companies in Cyprus and/or vice versa. Being a European Union Member State, a Cypriot company has access to all the benefits of the EU Parent-Subsidiary Directive that, under certain circumstances, enable withholding tax exemption for dividends paid between EU subsidiaries and EU parent companies.

Also, a Cypriot company has access to the EU Interest and Royalty Directive that, under certain circumstances, entitles the company to exemption from withholding tax for interest and royalty payments between EU companies.

* All the treaties refer to those, which have been ratified. The numbers in brackets refer to the explanatory notes hereinafter.

** Under Cyprus tax law, dividends paid to non-resident companies are not subject to withholding tax.

For more information and/or advice, please contact us via email at info@finexpertiza.cy