All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Cyprus: Cyprus expands its treaty network with Lithuania and Guernsey

kokoni.jpg

Zoe Kokoni

Cyprus, which has been long-established as a solid economic and business centre worldwide, seeks to reinforce its title as a beneficial investment hub by expanding its double tax treaty network and creating stronger economic and trade relations with other contracting states.

Cyprus and Lithuania DTT

On June 21 2013, Cyprus and Lithuania signed their first double tax treaty (DTT). Since then, the countries have ratified the agreement, which will enter into force on January 1 2015.

In summary, the new provisions of the ratified agreement cover:

  • Dividends: No withholding tax (0%) where the recipient is a company and

    • is the beneficial owner of the dividends; and

    • owns at least (minimum) 10 % capital of the company.

    • In all other cases a 5% withholding tax shall be applicable.

    • Interest: No withholding tax (0%).

  • Royalties: 5% withholding tax provided that the recipient is the beneficial owner.

  • Capital gains: gains, resulting from the disposal of shares, are taxable in the country in which the alienator of the shares is tax resident.

Cyprus and Guernsey DTT

On July 15 2014 Cyprus and Guernsey signed a double taxation avoidance agreement, which will enter into force upon the ratification of the agreement by the two contracting states. The agreement is based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.

Briefly, the main provisions of the agreement between the two contracting states provide a 0% withholding tax rate for dividends, interest and royalty payments. For capital gains, gains for a resident of one of the two countries (ex. A), resulting from the disposal of immovable property in the other country (ex. B), will be taxed in the country where the immovable property is situated (ex. B). Gains resulting from the disposal of shares are taxable in the country in which the alienator of the shares is tax resident.

Zoe Kokoni (zoe.kokoni@eurofast.eu)
Eurofast, Cyprus office

Tel: +357 22 699 222

Website: www.eurofast.eu

More from across our site

This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree