Double Tax Treaties

DOUBLE TAX TREATIES

Cyprus has established itself as one of the leading financial centres in the world. Businesses and Entrepreneurs from its region, the Balkans and Middle East, and Eastern Europe, India, amongst others, use Cyprus for their International transactions and entrepreneurship. One of the main advantages is its extensive double tax treaty network. All treaties have been drafted according to the OECD model tax treaty. The treaties in conjunction with the European Union Parent- Subsidiary and Interest directives provide the business world the ideal place to contact business. As in all cases the Double tax treaties and EU directives taxation rate prevails the domestic law if the taxation is lower. Payments of dividends and interest to non residents are exempt from withholding tax in Cyprus. Also payments from Cyprus  of Royalties are exempt from withholding tax unless the Royalty Rights are used within Cyprus.

Received in Cyprus

Paid from Dividends

%

 Interest

%

 Royalties

%
Andorra Nil Nil Nil
Armenia 0/5 (1) 0/5 (2) 5
Austria 10 Nil Nil
Bahrain Nil Nil Nil
Barbados Nil Nil Nil
Belarus 5/10/15 (3), (4) 5 5
Belgium 10/15 (4) 0/10 (2), (5) Nil
Bosnia (6) 10 10 10
Bulgaria 5/10 (7) 0/7 (2), (8) 10 (8)
Canada 15 0/15 (9) 0/10 (10)
China, P.R. 10 10 10
Croatia (45) 5 0/5 (47) 5
Czech Republic 0/5 (11) Nil 0/10 (12)
Denmark 0/15 (2), (11), (13) Nil Nil
Egypt 5/10 (14) 10 10
Estonia Nil Nil Nil
Ethiopia 5 0/5 (2) 5
Finland 5/15 (15) Nil Nil
France 10/15 (16) 0/10 (17), (18) 0/5 (18)
Georgia Nil Nil Nil
Germany 5/15 (19) Nil Nil
Greece 25 10 0/5 (18)
Guernsey Nil Nil Nil
Hungary 5/15 (7) 0/10 (2) Nil
Iceland 5/10 (16) Nil 5
India 10 0/10 (20) 10 (21)
Iran 5/10 (7) 0/5 (2) 6
Ireland, Rep. of Nil Nil 0/5 (18)
Italy 15 10 Nil
Jersey Nil Nil Nil
Jordan 5/10 (16) 0/5 (2) 7
Kazakhstan 5/15 (16) 0/10 (2) 10
Kuwait Nil Nil 5
Latvia 0/10 (22) 0/10(22) 0/5 (23)
Lebanon 5 0/5 (2) Nil
Lithuania 0/5 (16) Nil 5
Luxembourg 0/5 (16) Nil Nil
Malta Nil 0/10 (2) 10
Mauritius Nil Nil Nil
Moldova 5/10 (7) 5 5
Montenegro (6) 10 10 10
Netherlands (45) 0/15 (46) Nil Nil
Norway 0/15 (24) Nil Nil
Poland 0/5 (25) 0/5 (2) 5
Portugal 10 10 10
Qatar Nil Nil 5
Romania 10 0/10 (2) 0/5 (26)
Russia 5/15 (27) 0/5/15 (28) Nil
San Marino Nil Nil Nil
Saudi Arabia 0/5 (29) Nil 5/8 (30)
Serbia (6) 10 10 10
Seychelles Nil Nil 5
Singapore Nil 0/7/10 (2), (31) 10
Slovak Republic (38) 10 0/10 (2) 0/5 (26)
Slovenia 5 0/5 (2) 5
South Africa 5/10(33) Nil Nil
Spain 0/5 (34) Nil Nil
Sweden 5/15 (7) 0/10 (2) Nil
Switzerland 0/15 (35) Nil Nil
Syria 0/15 (36) 0/10 (9) 10/15 (37)
Thailand 10 0/10/15 (38) 5/10/15 (39)
Ukraine 5/10 (40) 0/5 (9) 5/10 (41)
United Arab Emirates Nil Nil Nil
United Kingdom 0/15 (42) Nil Nil
United States 5/15 (43) 0/10 (44) Nil

Notes- Table B- inbound payments to Cyprus 

  1. The WHT rate of 5% applies where a dividend is paid by a company in which the beneficial owner has invested less than €150.000.
  2. No WHT if paid to the government/Central Bank/ Public Authority of the other
  3. A WHT rate of 5% applies where the investment is not less than €200.000 in the share capital of the company paying the If such investment is less than €200.000, dividends are subject to 15% WHT.
  4. For Belarus DTT a 10% WHT rate and for Belgium DTT the lower WHT rate applies to companies holding directly or indirectly at least 25% of the share capital of the company paying the In all other cases the higher WHT rate applies.
  5. No WHT for interest on deposits with banking
  6. Serbia, Slovenia Montenegro and Bosnia apply the Yugoslavia/Cyprus
  7. Lower WHT rate applies to companies holding directly at least 25% of the share capital of the company paying the In all other cases the higher WHT rate applies.
  8. The treaty rates do not apply if the payment is made to a Cyprus entity by a resident of Bulgaria owning directly or indirectly at least 25% of the share

capital of the Cyprus entity and the Cyprus entity pays tax in Cyprus at a tax rate lower than the usual tax rate.

  1. Nil if paid to a government/Central Bank/ Public Authority or for export
  2. Nil on literary, dramatic, musical, or artistic work (but not including royalties in respect of motion picture films and works on film or videotape for use in connection with television).
  3. No WHT if received by a company (excluding partnership) which holds directly at least 10% of the share capital of the paying company for an uninterrupted period of no less than one year.
  4. 10% WHT applies for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific
  5. No WHT if the beneficial owner is a pension fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, where such pension fund or other similar institution is established, recognized for tax purposes and controlled in accordance with the laws of that other State.
  6. A WHT rate of 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 20% of the capital of the company paying the dividends throughout a 365-day period that includes the day of the payment of the dividend. A WHT of 10% applies in all other cases.
  1. A WHT rate of 15% applies if received by a company controlling less than 10% of the voting power in the paying company and in all cases if received by an individual or a partnership.
  2. Nil or lower WHT rate applies to companies (excluding partnerships) holding directly at least 10% of the share capital of the company paying the In all other cases the higher WHT rate applies.
  3. Nil if paid to a government, bank, or financial institution. Nil also applies if related to a sale on credit of any industrial, commercial or scientific equipment or a sale on credit of any merchandise by one enterprise to another
  4. A WHT rate of 5% on royalties for cinematographic films including films and video tapes for With respect to France DTT the 5% WHT applies on cinematographic film royalties (other than films shown on television).
  5. Lower WHT rate applies to companies holding directly at least 10% of the share capital of the company paying the In all other cases the higher WHT rate applies.
  6. Nil if paid to a government or any other institution agreed upon between the two States.
  7. A WHT rate of 10% is also applicable for payments of a technical, managerial, or consulting nature.
  8. Nil applies if the payer is a company that is a resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is a resident in 10% rate applies for all other cases (except for certain governmental interest).
  9. Nil applies if the payer is a company that is a resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is a resident in Cyprus. 5% rate applies for all other cases.
  10. Nil rate applies if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends or if the beneficial owner of the shares is the Government of Cyprus or Norway. A WHT rate of 15% in all other cases.
  11. Nil rate applies if the recipient company (partnership is excluded) holds directly 10% of the share capital of the paying company for an uninterrupted period of at least 2 years. 5% in all other cases.
  12. 5% WHT rate applies for patents, trademarks, designs or models, plans, secret formulas, or processes, or any industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
  13. A WHT rate of 5% applies if the beneficial owner of the company is an insurance undertaking or pension fund, or if the beneficial owner is a company whose shares are listed on a registered stock exchange provided no less

than 15% of the voting shares of that company are in free float and which holds directly at least 15% of the capital of the company paying the dividends throughout a 365 day period that includes the day of payment of the dividends, or if the beneficial owner of the dividends is the government of that contracting state or a political subdivision / local authority thereof.

  1. A WHT rate of 0% applies on interest if the beneficial owner is an insurance undertaking or a pension fund, or the Government of that Contracting State or a political subdivision or a local authority thereof, or the Central Bank of that Contracting State, or a bank. A WHT rate of 0% also applies on interest paid in respect of securities that are listed on a recognized stock exchange (government bonds, corporate bonds, Eurobonds). A WHT rate of 5% applies if the beneficial owner is a company whose shares are listed on a registered stock exchange provided no less than 15% of the voting shares of that

company are in free float and which holds directly at least 15% of the capital of the company paying the interest throughout a 365-day period that includes the day of payment of the interest. A WHT of 15% applies in all other cases.

  1. Nil rate applies to companies (excluding partnerships) holding directly or indirectly at least 25% of the share capital of the company paying the 5% WHT rate applies in all other cases.
  2. 5% WHT rate applies on payments for the use of, or the right to use, industrial, commercial or scientific equipment. A WHT rate of 8% applies in all other
  3. A WHT rate of 7% if paid to a bank or financial
  4. The Cyprus – Czechoslovakia treaty applies with the Slovak
  5. Lower WHT rate applies to companies holding at least 10% of the share capital of the company paying the dividend. In all other cases the higher WHT rate
  6. A WHT rate of 5% if received by a company holding less than 10% of the capital of the paying company and in all cases if received by an individual or a company not limited at least partly by shares.
  7. Nil rate applies if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends during an uninterrupted period of at least one year (the holding period condition may be satisfied post the date of the dividend payment).

Nil rate also applies if the beneficial owner is a pension fund or other similar institution or relates to the Government of Cyprus or Switzerland. 15% in all other cases.

  1. A WHT rate of 15% if received by a company holding less than 25% of the share capital of the paying company and in all cases if received by an individual or a company not limited at least partly by shares.
  2. 10% WHT rate applies on payment of royalties of any copyright of literary, artistic or scientific work including cinematograph films, and films or tapes for television or radio A rate of 15% applies on payments of royalties of any patent, trademark, design or model, plan, secret formula or process,

or any industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience.

  1. No WHT if paid to the government/Central Bank/ Public Authority of the other state. A WHT rate of 10% on interest received by a financial institution or when it relates to sale on credit of any industrial, commercial, or scientific equipment or of merchandise. 15% in all other cases.
  2. A WHT rate of 5% applies for any copyright of literary, dramatic, musical, artistic, or scientific work. A WHT 10% rate applies for industrial, commercial, or scientific A 15% rate applies for patents, trademarks, designs or models, plans, secret formulas, or processes.
  3. A WHT rate of 5% applies if the beneficial owner company (other than a partnership) holds directly at least 20% of the capital of the paying company and has invested at least EUR100.000 in the acquisition of shares or other rights in the paying company. A WHT rate of 10% applies in all other cases.
  4. A WHT 5% WHT will be levied on payment of royalties in respect of any copyright of scientific work, any patent, trademark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% WHT will be levied in all other cases.
  5. A WHT rate of 15% applies to dividends paid out of income (including gains) derived directly or indirectly from immovable property by an investment vehicle which distributes most of its income annually and whose income from such immovable property is exempt from tax, except for cases where the beneficial owner of the dividend is a pension scheme established in Cyprus. Nil rate applies in all other cases.
  6. A WHT rate of 15% if received by a company controlling less than 10% of the voting power of the paying company and in all cases if received by an

individual. If a company controls at least 10% of the voting power of the paying company in order to benefit from the WHT rate of 5% other conditions relating to the income of the paying company need to be satisfied, otherwise a WHT rate of 15% applies.

  1. Nil if paid to a government, bank, or financial institution. Also, nil if related to debt obligations guaranteed by Government, or in connection with the sale of property or the performance of services.
  2. The treaty is effective as from 1 January
  3. Nil rate applies if the beneficial owner is a company which holds directly at least 5% of the capital of the company paying the dividends throughout a 365- day period that includes the day of the payment of the dividend. Nil rate also applies if the beneficial owner is a recognised pension fund which is generally exempt under corporate income tax laws. A WHT rate of 15% applies in all other cases.
  4. Nil if related to a sale on credit of any industrial, commercial or scientific
    equipment or a sale on credit of any merchandise by one enterprise to another
    enterprise. Nil also applies if paid to a bank.

DOUBLE TAX TREATIES

Cyprus has established itself as one of the leading financial centres in the world. Businesses and Entrepreneurs from its region, the Balkans and Middle East, and also Russia, Ukraine, the former CIS countries, India, amongst others, use Cyprus for their International transactions and entrepreneurship. One of the main advantages is its extensive double tax treaty network. All treaties have been drafted according to the OECD model tax treaty. The treaties in conjunction with the European Union Parent- Subsidiary and Interest directives provide the business world the ideal place to contact business. As in all cases the Double tax treaties and EU directives taxation rate prevails the domestic law if the taxation is lower. Payments of dividends and interest to non residents are exempt from withholding tax in Cyprus.

Summary of Withholding Tax rates
Countries Paid from Cyprus to residents of the
following countries		 Paid from the following countries to residents
of Cyprus
Dividends Interest Royalties Dividends Interest Royalties
% % %** % % %
Andorra(31) 0 0 0 0 0 0
Armenia 0(32) 5 5 0(32) 5(33) 5
Austria 10 0 0 10 0 0
Bahrain 0 0 0 0 0 0
Barbados 0 0 0 0 0 0
Belarus 5(4) 5 5 5(4) 5 5
Belgium 10(1) 10(8.28) 0 10(1) 10(8.28) 0
Bulgaria 5(19) 7(25) 10 5(19) 7(25.20) 10(20)
Canada 15 15(7) 10(11) 15 15(7) 10(11)
China 10 10 10 10 10 10
C.I.S. (ex USSR)*** 0 0 0 0 0 0
Czech Republic 0(30) 0 0(31) 0(30) 0 0(31)
Denmark 0(8.2) 0 0 0(8.2) 0 0
Egypt 15 15 10 15 15 10
Ethiopia 5 5 5 5 5 5
Estonia 0 0 0 0 0 0
Finland 5(41) 0 0 5(41) 0 0
France 10(2) 10(9) 0(27) 10(2) 10(9) 0(27)
Georgia 0 0 0 0 0 0
Germany 5(37) 0 0 5(37) 0 0
Greece 25 10 0(12) 25(21) 10 0(12)
Guernsey 0 0 0 0 0 0
Hungary 5 10(8) 0 5(1) 10(8) 0
Iceland 5(44) 0 5 5(39) 0 5
India 10 10(8) 10 10 10(8) 10
Iran 5(19) 5 6 5(19) 5 6
Ireland 0 0 0(12) 0 0 0(12)
Italy 15 10 0 15 10 0
Jersey 0 0 0 0 0 0
Kuwait 10 10(8) 5(14) 10 10(8) 5(14)
Kyrgyzstan*** 0 0 0 0 0 0
Latvia 0(42) 0(42) 0(42) 0(43) 0(42) 0(43)
Lebanon 5 5(16) 0 5 5 0
Lithuania 0(45) 0 5 0(45) 0 5
Luxembourg 0(35) 0 0 0(40) 0 5
Malta 0(22) 10(8) 10 0(22) 10(8) 10
Mauritius 0 0 0 0 0 0
Moldova 5(29) 5 5 5(19) 5 5
Montenegro**** 10 10 10 10 10 10
Norway 0 0 0 0(46) 0 0
Poland 0(40) 5(25) 5 0(40) 5(25) 5
Portugal 10 10 10 10 10 10
Qatar 0 0 5 0 0 5
Romania 10 10(8) 5(14) 10 10(8) 5(14)
Russia 5(6) 0 0 5(6) 0 0
San Marino 0 0 0 0 0 0
Saudi Arabia 0(44) 0 0(45) 0(44) 0 5(45)
Serbia**** 10 10 10 10 10 10
Seychelles 0 0 5 0 0 5
Singapore 0 10(23) 10 0 10(23) 10
Slovak Republic 10 10(8) 5(14) 10 10(8) 5(14)
Slovenia 5(42) 5 5 5(42) 5 5
South Africa 10 0 0 10(41) 0 0
Spain 0(34) 0 0 0(34) 0 0
Sweden 5(1) 10(8) 0 5(1) 10(8) 0
Switzerland(43) 0(8.2) 0 0 0(8.2) 0 0
Syria 0(1) 10(8) 15(13) 0(1) 10(8) 15(13)
Tajikistan*** 0 0 0 0 0 0
Thailand 10 15(17) 5(18) 10 15(17) 5(18)
Ukraine 5(21) 5 5(15) 5(35) 5 5(15)
United Arab Emirates 0 0 0 0 0 0
United Kingdom 0 0 0(27) 0(24) 10 0(27)
U.S.A. 5(5) 10(10) 0 5(5) 10(10) 0
Uzbekistan*** 0 0 0 0 0 0
Former Yugoslavia **** 10 10 10 10 10 10


Explanatory Notes:

  1. 15% if recipient is a company controlling less than 25% of the voting power.
  2. 15% if recipient is a company controlling less than 10% of the voting power
  3. 5% if paid to a company controlling less than 50% of the voting power
  4. This rate applies if the amount invested by the beneficial owner is over EUR 200.000 irrespective of the % of voting power acquired. 10% is imposed if received by a holder of at least 25% of the share capital of the paying company. Otherwise the rate is 15%.
  5. 5 % if received by a company controlling at least 10% of the voting power.
  6. 10% if recipient is a company, which has invested less than €100.000
  7. Nil if paid to the Government or for export Guarantee.
  8. Nil if paid to the Government of the other state.
  9. Νil if paid to the Government of the other State or in connection with the sale οn credit of any industrial. Commercial or scientific equipment or any merchandise by one enterprise to another or in relation to any form of loan granted by a bank or is guaranteed from government or other governmental organization
  10. Νil if paid to the Government of the other State, to a bank or a financial institution or in respect to debt obligations arising in connection with sale of property or the provision of services.
  11. Nil if royalties are copyright and other literary, dramatic, musical or artistic work not including television programmes.
  12. 5% on film royalties (not including films shown on television)
  13. 10% literary, dramatic, musical or artistic and television royalties.
  14. Nil on literary, artistic or scientific work including films.
  15. 10% on payment of technical fees management fees and consultancy fees.
  16. Νil if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits.
  17. 10% on interest received from financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies.
  18. 10% on right to use industrial. commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs , models, plans , secret formulas or processes
  19. 10% if received by a company, which owns less than 25% of the capital.
  20. This rate does not apply, where 25% or more of the capital of the Cypriot resident is owned directly or indirectly by the Bulgarian resident paying the royalties and the Cyprus company pays less than the normal rate of tax.
  21. The treaty provides for 25%, but the domestic rate of Νil applies since it is lower than the treaty rate.
  22. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid.
  23. 7% if paid to a bank or similar financial institution. Νil if paid to the government.
  24. The treaty provides for 15% withholding tax but the local taxation provides for 0% withholding tax.
  25. Νil if paid to or is guaranteed by the government, statutory body, the Central Bank.
  26. Not yet ratified.
  27. 5% on film royalties, including films used for television programs.
  28. No WHT for interest on deposits with banking institutions.
  29. This rate applies if received by a company (excluding partnerships) that holds directly 25% of the shares. A rate of 10% applies in all other cases.
  30. This rate applies if received by a company ( excluding partnership) which holds directly at least 10% of the shares for an uninterrupted period of no less than one year. 5% applies in all other cases.
  31. 10% for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
  32. A rate of 5% if a dividend is paid by a company in which the beneficial owner has invested less than EUR 150,000.
  33. Anew treaty has been signed and is now awaiting ratification.
  34. 5% withholding tax will apply if the holding is less than 10% of the share capital
  35. The tax is 5% if the beneficial owner holds at least 20% of the capital of the dividend paying company or has invested in the acquisition of shares or other rights of the dividend paying company of at least €100,000. In all other cases the withholding tax rate is 15%.
  36. The withholding tax rate on royalties in respect of any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience is 5%, and 10% in all other cases.
  37. A rate of 15% if a dividend is paid by a company in which the beneficiary owner is a company that holds less than 10% of the capital of the company that pays the dividends.
  38. Maximum of 5% will be paid on royalties that are taxed in the country were royalties are paid according to their legislation.
  39. 5% on dividends were the companies that pays the dividend is resident to that country and the recipient of the dividend is resident to the country were the dividends are paid.
  40. This rate applies if the recipient company (partnership is excluded) holds directly 10% of the share capital of the paying company for an uninterrupted period of at least 2 years. 5% in all other cases
  41. A rate of 15% applies if received by a company controlling less than 10% of the voting power in the paying company and in all cases if received by an individual.
  42. The provisions of the Parent-Subsidiary EU directive are applicable
  43. The treaty is effective 1 January 2016.
  44. 5% if the beneficial owner is a company (excluding partnerships) which holds directly at least 10% of the capital of the company paying the dividends. 10% in all other cases.
  45. NIL if the beneficial owner is a company (excluding partnerships) which holds directly at least at least 10% on the capital of the company paying the dividends. 5% in all other cases.
  46. 15% if received by an individual or received by a company directly holding less than 10% of the share capital of the company paying the dividends.

* Payments of dividends and interest to non-residents are exempt from withholding tax in Cyprus. Royalties granted for use outside of Cyprus are also free of withholding tax in Cyprus.

* * 10% in the case of royalties granted for use within the Republic.5% on film and TV rights.

* * * Azerbaitzian, Kyrgyztan, Tajikistan, and Uzbekistan apply the USSR/Cyprus treaty. The rates shown are those of the treaty Cyprus/USSR.

* * * * Serbia, Montenegro apply the Yugoslavia/Cyprus treaty.
Please contact a member of our staff for further information and/or clarifications.