Cyprus: Recent Developments In Cyprus DTT Network

Cyprus- Bahrain (DTT signed in March 2015)

In pursuit of strengthening the ties with all Gulf countries, on 9 March, 2015 Cyprus and Bahrain signed a Double Tax Treaty agreement.

The agreement is expected to contribute to further development of trade and economic relations between Cyprus and Bahrain.

Besides the DTT, a series of other agreements were also signed on such issues as terrorism and crime, aviation services and health.

The agreement applies to taxes on income imposed by either country and in Cyprus they are (i) income tax, (ii) corporate income tax, (iii) SDC tax and (iv) capital gains tax.

DTT updates an existing protocol and expands the network of similar deals based on the OECD Model Tax Convention and it is hoped to boost foreign direct investments to Cyprus.

Cyprus –South Africa (DTT signed in April 2015)

A Protocol amending the Double Tax Treaty between Cyprus and South Africa was signed on 1 April 2015. The Double tax treaty is based on the OECD Model.

DTT introduced a 5% withholding tax on dividends has been in, which is paid if the beneficial owner of the dividends is a company holding at least 10% of the capital of the company, which is paying the dividend. In all other cases the rate is 10% and it works retroactively to 1 April 2012, when South Africa introduced the taxation of dividends in the hands of the shareholders.

The amending protocol aimed to provide favorable tax framework for investors, enhances the exchange of information between the two countries, thus furthering and enhancing the growth of business opportunities between two countries.

Cyprus – Georgia (DTT signed in April 2015, expected to come into force on 1st January 2016)

On 2 April 2015, a DTT has been signed between Cyprus and Georgia.

The agreement is expected to come into force on 1 January 2016 when both countries are expected to complete the ratifications procedures.

The DTT applies to taxes on income as well as on gains from alienations of immovable property. In the case of Georgia, income tax, property tax and profits tax are covered by the Treaty while in the case of Cyprus, personal income tax, defence tax, capital gains tax and immovable property are covered.

Double Tax Treaty between the countries provides for zero withholding tax on dividends, interest and royalty payments. The DTT is expected to strengthen the economic relations between Cyprus and Georgia and promote inbound and outbound investments

Cyprus-Iran (DTT signed in August, expected to come into force on 1st January 2016)

On 4 August, 2015 Cyprus and Iran signed a Double Tax Treaty agreement during an official visit of the Iranian Deputy Finance Minister in Cyprus that is believed to pave the way for the expansion of business and investment opportunities between Iran and Cyprus.

The DTT agreement came three weeks after world powers reached a deal on Iran`s nuclear activity to gradually lift international sanctions.

The new agreement opens up new opportunities for the expansion and upgrading of the Cyprus network of Double Taxation Agreements and is of high economic and political importance and aims to further strengthen and attract foreign investment and elevates the importance of Cyprus as an international business center.

Summarizing:

1)      Dividends. 5% withholding tax on dividends paid, if the beneficial owner of the dividends is a company holding at least 25% of the capital of the company paying the dividend, in all other cases 10%;

2)      Interest. 5% withholding tax;

3)      Royalties. 6% withholding tax;

4)      Capital Gains. Gains from the disposal of immovable property may be taxed in the country where the immovable property is situated. Gains from the disposal of shares, deriving more than 50% of their value directly or indirectly from immovable property may be taxed in the country in which the immovable property is situated.

The DTT is based on the OECD Model and is expected to enter into force on the 1st of January 2016, following the date of the ratification by both countries.

*For more detailed account of DTT treaties concluded with Cyprus, please see attached Annex.

Cyprus Tax Treaty Partners

Source – Ministry of Finance of the Republic of Cyprus

http://www.mof.gov.cy/icons/ecblank.gif

State

Date of
Signature
Treaty/Protocol/
Note

Date of entry
into force

Date of Publication in the Official Gazette
of the Republic
(Number and date)

1

Austria
(new agreement)

20 Mar 1990
21 May 2012

10 Nov 1990
11 Jan 2013

2500 - 27 Apr 1990
4160 - 5 Oct 2012

2

Bulgaria

30 Oct 2000

3 Jan 2001

3461 - 30 Dec 2000

3

Belarus

29 May 1998

12 Feb 1999

3273 - 9 Oct 1998

4

Belgium

14 May 1996

8 Dec1999

3365 - 19 Nov 1999

5

Canada

2 May 1984

3 Sep1985

2053 - 31 May 1985

6

China

25 Oct1990

5 Oct 1991

2578 - 22 Feb 1991

7

Denmark
Treaty
Notes
New Agreem.*

26 May 1981

11 Oct 2010

10 Aug 1981
10 Apr 1982
7 Sept 2011

1704 - 17 Jul 1981
2034 - 24 Sep 1982
4145 - 5 Sept 2011

8

Egypt

18 Dec1993

14 Mar1995

2865 -11 Mar 1994

9

France

18 Dec1981

1 April 1983

1468 - 9 Jul 1982

10

Germany
new Agreement

9 May 1974
18 Febr 2011

11 Oct 1977
16 Dec 2011

1199 - 27 Jun 1975
4145- 5 Sept 2011

11

Greece

30 Mar1968

16 Jan 1969

651 - 10 May 1968

12

Hungary

30 Nov1981

24 Nov 1982

862 - 7 May 1982

13

India

13 Jun 1994

21 Dec 1994

2921 - 4 Nov 1994

14

Ireland

24 Sep1968

12 Jul1970

726 - 19 May 1969

15

Italy
Treaty
Protocol
(Additional Protocol)

24 April 1974
7 Oct 1980
4 Jun 2009

9 June 1983

1586 - 5 Sep 1980

4 Jun 1982
4125 - 4 Jun 2010

16

Kuwait
(New Agreement)

15 Dec 1984
5 Oct 2010

25 Sep 1986

2026 - 18 Jan 1985
4145 - 5 Sept 2011

17

Lebanon

18 Feb 2003

14 Apr 2005

3976 - 8 Apr 2005

18

Malta

22 Oct 1993

11 Aug 1994

2860 - 25 Feb 1994

19

Mauritius

21 Jan 2000

12 Jun 2000

3410- 2 Jun 2000

20

Norway
(new agreement)

2 May 1991
24 Feb 2014

1 Jan 1995

11 Jun 1996
4180 - 20 Jun 2014

21

Poland
(new agreement)

4 Jun 1992
22 Mar. 2012

9 Jul 1993
11 Jan 2013

2735 - 4 Sep1992
4156 - 30 Mar. 2012

22

Romania

16 Nov 1981

8 Nov 1982

1757 - 26 Feb 1982

23

Russia
(Amendment Protocol)

5 Dec1998
7 Oct 2010

17 Aug 1999
2 April 2012

3306 - 26 Feb 1999
4145 - 5 Sept 2011

24

South Africa

1 April 2015
(26 Nov 1997)

8 Dec1998

4195 8 May 2015
3214 - 16 Jan 1998

25

Sweden

22 Oct 1988

14 Nov1989

2377 - 20 Jan 1989

 

 

 

 

 

26

Syria

15 Mar 1992

22 Feb 1995

2863 - 4 Mar 1994

27

Singapore

24 Nov 2000

8 Feb 2001

3641 - 30 Dec 2000

28

Thailand

27 Oct 1998

4 April 2000

3394 - 17 Mar 2000

29

United Kingdom
Treaty
Protocol

20 Jun1974
2 Apr 1980

1 Nov1974

1107 - 5 Jul 1974

30

USA

19 Mar 1984

31 Dec 1985

1944 - 4 April 1984

31

Serbia*

29 Jun1985

8 Sep1986

2073 - 23 Aug1985

32

Montenegro*

29 Jun1985

8 Sep 1986

2073 - 23 Aug1985

33

Slovenia*
(New Agreement)

29 Jun1985
12 Oct 2010

8 Sep 1986
14 Sept 2011

2073- 23 Aug1985
4145 - 5 Sept 2011

34

Slovakia**

15 April 1980

30 Dec 1980

1599 - 3 May1980

35

Czech Republic

(new agreement)

15 April1980

28 April 2009

30 Dec 1980

26 Nov 2009

1599 - 3 May1980

4114 - 13 Nov 2009

36

Azerbaijan***

29 Oct 1982

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.30E8?OpenElement&FieldElemFormat=gif26 Aug 1983

26 Nov 1982

37

Armenia

17 Jan 2011

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.33CC?OpenElement&FieldElemFormat=gif19 Sept 2011

4145- 5 Sept 2011

38

Kyrgyzstan***

29 Oct 1982

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.3662?OpenElement&FieldElemFormat=gif26 Aug 1983

26 Nov 1982

39

Moldova

28 Jan 2008

03 Sept 2008

4098 - 29 Aug 2008

40

Tajikistan***

29 Oct 1982

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.39D4?OpenElement&FieldElemFormat=gif26 Aug 1983

26 Nov 1982

41

Uzbekistan***

29 Oct 1982

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.3C64?OpenElement&FieldElemFormat=gif26 Aug 1983

26 Nov 1982

42

Ukraine***
(new agreement)

29 Oct 1982
8 Nov 2012

http://www.mof.gov.cy/mof/mof.nsf/9112eddbfa7ba148c22579090034a907/cad18d0c22ff0177c22579090035f917/MainText/0.3F26?OpenElement&FieldElemFormat=gif26 Aug 1983

1 Jan 2014

26 Nov 1982
4167 - 22 March 2013

43

Seychelles

28 Jun 2006

27 Oct 2006

25 Oct 2006

44

San Marino

27 April 2007

18 July 2007

4088 - 13 July 2007

45

Quatar

11 Nov 2008

20 Mar 2009

4099 - 14 Nov 2008

46

United Arab Emirates

27 Febr 2011

1 Jan 2014

4145 - 5 Sept 2011

47

Estonia

15 Oct 2012

8 Oct. 2013

4146 - 1 Febr 2013

48

Finland

15 Nov 2012

27 Apr. 2013

4167 - 22 Mar. 2013

49

Portugal

19 Nov 2012

1 Jan. 2014

4167 - 22 Mar. 2013

50

Bosnia*

29 June 1985

8 Sept 1986

2073 - 23 Aug 1985

51

Lithuania

21 June 2013

17 Απρ 2014

4173 - 4 Dec 2013

52

Spain

14 Febr 2013

28 May 2014

4167 - 22 Mar 2013

53

The States of Guernsey

15 Jul 2014 in Cyprus, 29 Jul 2014 in Guernsey

4 Mar. 2015

4182 - 14 Aug 2014

54

Swiss Confederation

25 July 2014

http://www.mof.gov.cy/icons/ecblank.gif

4181- 30 July 2014

55

Iceland

13 Nov 2014

22 Dec 2014

4191 - 19 Dec 2014

56

Kingdom of Bahrain

9 March 2015

http://www.mof.gov.cy/icons/ecblank.gif

4193 - Mar. 2015

57

Georgia

13 May 2015

http://www.mof.gov.cy/icons/ecblank.gif1 Jan 2016 expected

4196 - 29 May 2015

58

Iran

4 August, 2015

1 Jan 2016

expected

 

*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.

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