A double taxation agreement between Spain and Cyprus was signed in Nicosia today by the Spanish ambassador and the Minister of Finance of the Republic of Cyprus.
The agreement has been under negotiation for several years. Little progress was made until 2009, as a result of Cyprus having been included in the Spanish authorities' so-called black list of tax havens, despite the fact that it complied with all relevant information exchange requirements, resulting in Cyprus-resident companies being denied certain Spanish tax benefits and exemptions. In 2009 the Spanish authorities removed the restrictions and progress in the negotiations regarding the double taxation agreement resumed.
The signing of the agreement is expected to lead to a substantial expansion of economic ties and reciprocal investment activities between the two countries. The agreement, like all of Cyprus's double tax agreements, is based on the OECD Model Treaty. As soon as details are available we will publish them on our website, including the date the agreement takes effect, which is likely to be 1 January 2014. Until the new agreement takes effect unilateral relief for Spanish taxes paid will continue to be available under domestic tax legislation.
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