A 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 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

The full text of Cyprus's Tax Treaties can be downloaded here:

(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:

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.

*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.

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.

*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.

* No tax is withheld when the royalty is paid for use outside Cyprus

Full summaries, as well as the full text of the above treaties, are available (on request) from Our Offices.

For more detailed information about the Tax Law - Tax Facts, please either use the main menu on the left or click below to go to the relevant section (quicker):

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