The Spanish government has announced that the double tax agreement between Cyprus and Spain, which was signed on 14 February 2013, will enter into force on 28 May 2014, on expiration of the period of three months from the date of receipt of the last notification referred to in paragraph 1 of article 27 of the agreement. The Cyprus tax authorities have indicated that they will allow the benefits included in the new agreement with effect from 1 January 2014.
For several years up to 2009 Cyprus-resident companies were ineligible for certain Spanish tax benefits and exemptions on account of Cyprus being included in the Spanish authorities' so-called black list of tax havens, despite complying with all relevant information exchange requirements. In 2009 the Spanish authorities removed the restrictions and progress in the negotiations regarding the double taxation agreement resumed. The entry into force of the agreement normalises tax relations between the two countries and has already led to a significant expansion of economic ties and reciprocal investment between them.
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