There is no withholding tax on dividends and interest paid from Cyprus and no withholding tax on royalty payments for use of the rights outside Cyprus. Possible use can also be made of the EU Directives to eliminate or reduce the rates so rendering the treaty benefits redundant. Treaties will be used where EU Directives are not applicable.

Cyprus is probably the only country worldwide which is considered a tax incentive country and at the same time offers important international tax planning opportunities and advantages through its wide double tax treaty network.
The countries with which Cyprus has signed double tax treaties are shown in the table below. For further clarifications please contact our office here.

Management and control for treaty purposes

In order that a Cyprus company may be entitled to take advantage of a Double Tax Treaty, it should be considered resident in Cyprus. For the purpose of most treaties a Cypriot company may be deemed resident in Cyprus if the majority of its directors reside in Cyprus, board meetings take place in Cyprus and generally the decision making is in Cyprus.

Cyprus Tax Treaties

Notes

*7 Denmark – The existing Convention shall cease to have effect as from 1.1.2012

* The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is still in force.

** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in force

***The treaty between Cyprus and the Union of Soviet Socialist Republics is still in force.