Cyprus: Cyprus and Latvia sign DTA
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cyprus: Cyprus and Latvia sign DTA

intl-updates-small.jpg

The details of the first agreement for the avoidance of double taxation (DTA) between Cyprus and Latvia became available in August 2016, providing information on the various applicable tax rates.

christodoulou.jpg

Andri Christodoulou

The DTA, which is based on the 2010 OECD Model Convention, was signed on May 24 2016 and ratified by both parties on June 3 2016. The agreement is expected to contribute to the further development of the economic relations between Cyprus and Latvia, as well as with other countries.

The main withholding tax rates with respect to dividends, interest and royalties are as follows:

  • 0% withholding tax on dividends if the beneficial owner is a company (other than a partnership), and 10% in all other cases;

  • 0% withholding tax on interest payments made to a company resident in the other contracting state that is the beneficial owner thereof. If the beneficial owner is not the recipient company of the interest then the withholding tax rate will be 10%; and

  • 0% withholding tax on royalty payments made to a company resident in the other contracting state that is the beneficial owner thereof. If the recipient company is not the beneficial owner of the royalty, then the withholding tax rate will be 5%.

Separately, Article 4 of the DTA does not provide for the standard tie-breaker rule for determining the residence of a taxpayer, other than an individual, that is a resident of both states. In this situation, dual residence is resolved by the competent authorities of the two states by mutual agreement.

Article 5 of the agreement on permanent establishments (PEs) provides a nine-month duration criteria that a building site, construction or assembly or installation project, or a connected supervisory or consultancy activity must fulfil in order to constitute a PE.

Although the double tax treaty is based on the OECD 2010 Model Convention, Article 7 of the Cyprus-Latvia DTA is based on the 2008 OECD Model Convention.

Meanwhile, Article 8 on shipping and air transport provides that profits of an enterprise of a state from the operation of ships or aircraft in international traffic are taxable only in that state.

The treaty also includes articles relating to offshore activities and on independent personal services (Article 14) in line with the UN Model (2001). Article 26 (exchange of information) is based on the OECD Model.

The treaty will take effect from January 1 in the year after all legal formalities and ratifications are completed to bring the treaty into force.

Andri Christodoulou (andri.christodoulou@eurofast.eu)

Eurofast Taxand Cyprus

Tel: +357 22 699 224

Website: www.eurofast.eu

more across site & bottom lb ros

More from across our site

Firms with a broad geographic reach are more likely to win work, especially from global companies with high turnovers, according to survey data of nearly 29,000 corporate counsel
Australian businessman Gordon Merchant used EY’s advice to offset an A$85 million capital gain, according to the Federal Court
Griggs has been drafted in ahead of schedule as the incumbent Tim Ryan departs for Citigroup; while the Netherlands plans to scrap a 15% share buyback tax
Authorities must ensure that Russian firms do not use transfer pricing schemes to increase profits made from oil sold in different markets, advocacy organisations have argued
Fallet, a partner at law firm Mauger Muniz Advogados in Brazil, tells ITR about his passion for tax law, the leaders who inspired him, and what makes tax cool
The former chief operating officer will assume the role on July 1
Ahead of next week's Indirect Tax Forum in London, ITR spoke with Christian Van Der Valk of Sovos about how different governments and companies are embracing e-invoicing
Konrad Jeczewski has alleged he was threatened with negative reviews before being made redundant by EY Australia
The suggestion was welcomed by Skadden’s European tax head at a special event on space and tax
A majority of clients – particularly high-earning businesses – want advisers with demonstrable social credentials, according to a survey of more than 28,000 corporate counsel
Gift this article