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Cyprus company formation package: 345 EURO – arrangement of Cyprus company formation (via officially licensed local member / partner firms) including VAT and Tax registration. "FBS KOTSOMITIS", operating since 1998, is a well-known and established international professional services network with officially licensed and regulated local member / partner firms. Contact us to start process by sending an email to enquiries@fbscyprus.com, by using our contact form or by calling at +357 22 456363
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Double Tax Treaties
Constructive use of the Cyprus Treaties’ Network has rendered considerable advantages to businesses and individuals who have chosen to establish legal entities in Cyprus. Tax treaties, in Cyprus and most countries, legally supersede local tax legislation and for this reason they are a useful tax-planning tool to protect businesses and individuals against double taxation of income earned in other countries. Notes:
  1. The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries. Under these agreements, a credit is usually allowed against the tax levied by the country in which the tax payer resides for taxes levied in the other treaty country, and as a result the tax payer pays no more than the higher of the two rates (a number of the treaties also contain very beneficial “tax-sparing credits”).
  2. The EU Parent Subsidiary and the Interest & Royalties Directives can be used to eliminate withholding taxes on payments of dividends, interest and royalties from or to EU Group Companies and the EU Merger Directive to eliminate the tax effects of EU Group reorganizations
DTT Table (Received in Cyprus) - updated Jan '06 DTT Table (Paid from Cyprus) - updated Jan '06 The full text of Cyprus's Tax Treaties can be downloaded here:
Cyprus - Austria
Cyprus - Lebanon
Cyprus - Austria Final Protocol
Cyprus - Macedonia
Cyprus - Belarus
Cyprus - Malta
Cyprus - Belgium
Cyprus - Mauritius
Cyprus - Bulgaria
Cyprus - Moldova
Cyprus Bulgaria Final Protocol
Cyprus - Montenegro
Cyprus - Canada
Cyprus - Poland
Cyprus - People's Republic of China
Cyprus - Portugal
Cyprus - Croatia
Cyprus - Romania
Cyprus - Czechoslovakia
Cyprus - Russian Federation
Cyprus - Denmark
Cyprus - Serbia
Cyprus - Egypt
Cyprus - Singapore
Cyprus - France
Cyprus - Slovenia
Cyprus - France Final Protocol
Cyprus - South Africa
Cyprus - Germany
Cyprus - South Africa Final Protocol
Cyprus - Germany Final Protocol
Cyprus - Sweden
Cyprus - Greece
Cyprus - Tajikistan
Cyprus - Hungary
Cyprus - Syria
Cyprus - Hungary Final Protocol
Cyprus - Thailand
Cyprus - India
Cyprus - Thailand Final Protocol
Cyprus - Ireland
Cyprus - Turkmenistan
Cyprus - Italy
Cyprus - UK
Cyprus - Italy Final Protocol
Cyprus - Ukraine
Cyprus - Kurkystan
Cyprus - USA
Cyprus - Kuwait
Cyprus - Uzbekistan
(updated Jan 2006) Important Note: to view the latest versions, click on the Refresh button while holding the Ctrl key down. If you have difficulty in downloading the Tax Treaties, please contact us. We will send them to you. 1) Received in Cyprus* Important Notes: *Possible use can be made of EU Directives to eliminate or reduce these rates - so rendering the treaty benefits is redundant. Treaties will be used where EU Directives are not applicable.
Received in Cyprus*
Country Dividends (%) Interest (%) Royalties (%)
Armenia 0/5 if the beneficial owner has invested in the capital of the Company less than equivalent of €150.000 at the time of the investment 5/0 if paid to the Government or to a local authority, or to the Central Bank 5
Austria The treaty has been published in the Gazette but has not come into force yet 10 0 0
Belarus 5/10/15 (5 if amount invested > 200.000 EURO irrespective of % of votes / 10 if at least 25% of share cap. / otherwise 15) 5 5
Belgium 10 / 15 if <25% of votes 10 / 0 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 0
Bulgaria 10/5 if received by a company owning < 25% of share cap. 7/0 if paid to or is guaranteed by the Government, statutory body, the Central Bank. 10 / does not apply if > 25% of cap. of Cypriot resident owned directly or indirectly by Bulgarian resident paying the royalties and the Cyprus company is subject to a preferential tax rate
Canada 15 0 / 15 if paid to the Government or for export guarantee 0 / 10 on literary, dramatic musical or artistic work with the exception of films used for television programs
China 10 10 10
Czech Republic 5/0 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 where such holding is being possessed for an uninterrupted period of not less than one year. 0 10
Denmark 15/0 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, where such holding is being possessed for an uninterrupted period of no less than 12 months if the beneficial owner is the other Contracting State or the Central Bank of that other State, or any national agency or any other agency (including a financial institution) owned or controlled by the Government of that other State 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 0 0
Egypt 15 15 10
France 10/15 if < 10% of votes 10 / 0 if paid to Government or in connection to the sale on 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 guaranteed from Government or other State body 0/5 on films including films used for television programs
Germany 5/15 if <10% of votes 0 0
Greece 25 but local rate is NIL so 0% 10 0 / 5 on film royalties (except films shown on TV)
Guernsey The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet 0 0 0
Hungary 0/15 if <25% of votes 10/0 if paid to public body or financial institution 0
Iceland The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet 10/5 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 0 0
India 10/15 if <10% of votes 10/ 0 if paid to public body or financial institution 15 / 10 on payment of technical fees, management fees and consultancy fees
Ireland 0 0 0 / 5 on film royalties (except films shown on TV)
Italy 0 10 0
Kuwait 10 10/ 0 if paid to public body or financial institution 5 / 0 on literary, artistic or scientific work including films
Lebanon 5 5 / 0 if paid to public body 0
Lithuania 5/0 if the beneficial owner is a company (other than a partnership) which holds directly at leat 10% on the capital of the company paying the dividends 0 5
Malta 15 The treaty provides that the tax on gross dividends shall not exceed that chargeable on the profits out of which the dividend is paid 10/ 0 if paid to public body or financial institution 10
Mauritius 0 0 0
Moldova 10/5 if >25% of votes 5 5
Montenegro The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet 10 10 10
Norway

15/0 if >10% of votes

0

0

Poland 5/0 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, where such holding is being possessed for an uninterrupted period of no less than 24 months

5/ 0 if paid to public body or financial institution

5
Portugal 10

10

10
Qatar 0 0 5
Romania 10 10/ 0 if paid to public body or financial institution 5 / 0 on literary, artistic or scientific work including films
Russia 5 / 10 if received by a company which has invested < $100.000 0 0
San Marino 0 0 0
Serbia The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies 10 10 10
Seychelles 0 0 5
Singapore 0 10 / 7 if paid to a Bank or similar financial institution / 0 if to the Government 10
Slovakia The treaty between the Republic of Cyprus and the Czechoslovak Socialist Republic still applies 10 10/ 0 if paid to public body or financial institution 5 / 0 on literary, artistic or scientific work including films
Slovenia 5 5/0 if the dividend is received by a company(other than a partnership) holding at least 10% of the capital of the dividend paying company 5
South Africa 0 0 0
Spain 5/0 if paid to public body or financial institution 0 0
Sweden 5/15 if <25% of votes 10/ 0 if paid to public body or financial institution 0
Switzerland The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet 0 (i) a company (other than a partnership) the capital of which is wholly or partly divided into shares and which holds directly at least 10% of the capital of the company paying the dividend for an uninterrupted period of at least one year. (ii) a pension fund or other similar institution recognized as such for tax purposes, or (iii) the Government, a political subdivision, local authority or central bank of one of the two contracting states. 15% in all other cases. 0 0
Syria 0/15 if <25% of votes 10/ 0 if paid to public body or financial institution 15 / 10 on literary, dramatic, musical, artistic work, films and TV
Tajikistan The treaty between the Republic of Cyprus and the United Soviet Socialist Republic still applies 0 0 0
Thailand 10 15 / 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 5 / 10 on right to use industrial, commercial or scientific experience / 15 on patents, trademarks, designs, models, plans, secret formulas or processes
Ukraine 15/5 is applicable if the dividend is received by a company owning 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 2 5
United Arab Emirates 0 0 0
United kingdom 15 but local UK tax provides for 0 - so 0% 10 0/5 on films including films used for television programs
United States of America 15 / 5 if more than 10% of votes 10 / 0 if paid to the Government or a bank or a fin. Inst. Or in respect to debt obligations arising in connection with sale of property or the provision of services 0
Uzbekistan The treaty between the Republic of Cyprus and the United Soviet Socialist Republic still applies 0 0 0
2) Paid from Cyprus Important Notes: *Low or no withholding taxes on outgoing dividends, interest and royalties (no withholding tax on dividends and interest – therefore there is no columns included below - no withholding tax on royalty payments for use of the rights outside Cyprus, 10% if the rights will be used in Cyprus (subject to DTT & EU Directives) and 5% on films (subject to DTT & EU Directives). * If the rates of Cyprus tax are lower than those provided by the relevant treaty, then the lower rates are applicable in favor of the taxpayer. *Possible use can be made of EU Directives to eliminate or reduce these rates - so rendering the treaty benefits is redundant. Treaties will be used where EU Directives are not applicable No tax is withheld when the royalty is paid for use outside Cyprus.
Paid from Cyprus
Country Royalties*(%)

Armenia

5

Austria

0

Belarus

5

Belgium

0

Bulgaria

10 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

Canada

10 / 0 on literary, dramatic musical or artistic work with the exception of films used for television programs

China

10

Czech Republic

10

Denmark

0

Egypt

10

France

0 /5 on films including films used for television programs

Germany

0

Greece

0 /5 on film royalties (except films shown on TV)

Guernsey The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet

0

Hungary

0

Iceland The treaty has been published in the Gazette but has not come into force until the time of publication of this booklet

5

India

15 / 10 on payment of technical fees, management fees and consultancy fees

Ireland

0 /5 on film royalties (except films shown on TV)

Italy

0

Kuwait

5 / 0 on literary, artistic or scientific work including films

Lebanon

0

Lithuania

5

Malta

10

Mauritius

0

Moldova

5

Montenegro

10

Norway

0

Poland

5

Portugal

10

Qatar

5

Romania

5 / 0 if paid to the Government of the other State or to a financial institution

Russia

0

San Marino

0

Serbia The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies

10

Seychelles

5

Singapore

10

Slovakia The treaty between the Republic of Cyprus and the Czechoslovak Socialist Republic still applies

5 / 0 on literary, artistic or scientific work including films

Slovenia

5

South Africa

0

Spain

0

Sweden

0

Syria

15 / 10 on literary, dramatic, musical, artistic work, films and TV

Tajikistan The treaty between the Republic of Cyprus and the United Soviet Socialist Republic still applies

0

Thailand

5 / 10 on right to use industrial, commercial or scientific experience / 15 on patents, trademarks, designs, models, plans, secret formulas or processes

Ukraine

5

United Arab Emirates

0

United Kingdom

0/5 on films including films used for television programs

United Sates of America

0

Uzbekistan The treaty between the Republic of Cyprus and the United Soviet Socialist Republic still applies

0

Contact one of our officers to initiate the incorporation of a Cyprus registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction. Simply fill in the contact box below or contact us by email on enquiries@fbscyprus.com
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