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Cyprus Company | Tax Treaties

Cyprus Company Formation and Cyprus Citizenship Packages

€950 – Cyprus Company Formation | €22.500 – Cyprus Citizenship

We are Cyprus Company Formation specialist consultants and Cyprus Citizenship specialists. We provide ALL the Cyprus company formation and company registration and management services as well as Cyprus Residency and Citizenship Services in order to obtain Cyprus Company Tax and Cyprus Residence and Citizenship Advantages. We have an experienced team of Company Formation and Citizenship professionals who are part of the FBS Kotsomitis Global Network. Your Trusted Partner in Cyprus for ALL your Cyprus Company Formation and Cyprus Citizenship Needs.

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 reorganization

Summary Tables

DTT Table (Received in Cyprus) – updated Jun ’17

DTT Table (Paid from Cyprus) – updated Jun ’17

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*
CountryDividends (%)Interest (%)Royalties (%)
Armenia0/5 if the beneficial owner has invested in the capital of the Company less than equivalent of €150.000 at the time of the investment5/0 if paid to the Government or to a local authority, or to the Central Bank5
Austria1000
Bahrain (The treaty is effective from 01/01/2017)000
Belarus5/10/15 (5 if amount invested > 200.000 EURO irrespective of % of votes / if less than EUR 200.000 then 15% reduced to 10% if at least 25% of share cap. owned)55
Belgium10/15 if received by a company holding <25% of votes and in all cases if received by an individual10/0 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 services0
Bosnia101010
Bulgaria10/5 if received by a company owning at least 25% of share cap7/0 if paid to or is guaranteed by the Government, statutory body, the Central Bank.10 / does not apply if at least 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
Canada1515/0 if paid to the Government or for export guarantee10/0 on literary, dramatic musical or artistic work with the exception of films used for television programs
China101010
Czech Republic5/0 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.010
Denm1ark15/0 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 State00
Egypt151510
Estonia000
Finland5/15 if received by a company holding <10% of votes and in all cases if received by an individual00
France5/15 if received by company (other than a partnership) holding < 10% of votes and in all cases if received by an individual10/0 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 body0/5 on films including films used for television programs
Georgia000
Germany5/15 if received by company holding < 10% of votes and in all cases if received by an individual00
Greece25100/5 on film royalties (except films shown on TV)
Guernsey000
Hungary5/15 if received by a company holding <25% of votes and in all cases if received by an individual10/0 if paid to public body or financial institution0
Iceland10/5 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 dividends05
India10/ prior to 1 April 2017 the rate is 15 if received by a company holding <10% of votes10/0 if paid to a government or any other institution agreed upon between the 2 states. Prior to 1 April 2017, 0 also applies if paid to a bank or financial institution10 / also applicable on payment of technical fees, management fees and consultancy fees. Prior to 1 April 2017, a rate of 15% applies on royalties
Ireland000/5 on film royalties (except films shown on TV)
Iran10/5 if received by a company that holds at least 25% of the capital of the paying company56
Italy15100
Jersey000
Kuwait005
Latvia0 if payer is a company that is resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is resident in Cyprus / 10 for all other cases0 if payer is a company that is resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is resident in Cyprus / 10 for all other cases (except for certain governmental interest)0 if payer is a company that is resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is resident in Cyprus / 5 for all other cases
Lebanon55/0 if paid to public body0
Lithuania0/5 if the beneficial owner is a company (other than a partnership) which holds less than 10% of the capital of the company paying the dividends and in all cases if received by an individual05
Malta0 The treaty provides that the tax on gross dividends shall not exceed that chargeable on the profits out of which the dividend is paid10/0 if paid to public body or financial institution10
Mauritius000
Moldova10/5 if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends55
Montenegro The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia applies101010
Norway15/0 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 dividends00
Poland5/0 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 months5/0 if paid to public body or financial institution5
Portugal101010
Qatar005
Romania1010/0 if paid to public body or financial institution5
Russia5/10 if received by a company which has invested < $100.00000
San Marino000
Serbia The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies101010
Seychelles005
Singapore010/7 if paid to a Bank or similar financial institution / 0 if to the Government10
Slovakia The treaty between the Republic of Cyprus and the Czechoslovak Socialist Republic still applies1010/0 if paid to public body or financial institution5/0 on literary, artistic or scientific work including films
Slovenia555
South Africa5 if the beneficial owner is a company which holds at least 10% of the capital of the company paying the dividend / 10 in all other cases. A protocol to the treaty entered into force on 18 September 2015 but may apply retrospectively00
Spain0/5 if received by a company holding < 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 shares00
Sweden5/15 if < 25% of votes10/0 if paid to public body or financial institution0
Switzerland0 (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.00
Syria0/15 if received by a company holding < 25% 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 shares10/0 if paid to public body or financial institution15/10 on literary, dramatic, musical, artistic or scientific work, including films or tapes for TV or radio broadcasting
Thailand1015/10 on interest received from financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies5 for any copyright of literary, dramatic, musical, artistic, or scientific work / 10 on right to use industrial, commercial or scientific equipment / 15 on patents, trademarks, designs, models, plans, secret formulas or processes
Ukraine15/5 is applicable if the dividend is received by a company owning at least 20% of the capital of the dividend paying company and has invested in the acquisition of shares or other rights of the dividend paying company of at least €100.00025 for any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience / 10 will be levied in all other cases
United Arab Emirates000
United Kingdom15/0 applies to dividends paid to a company that controls, directly or indirectly, at least 10% of the voting power of the payer company, as well as in other situations where dividends are paid to a resident of Cyprus that is not entitled to the same tax credit to which a UK resident individual would be entitled in respect of the dividends / but local UK tax provides for 0 – so 0%100/5 on films including films used for television programs
United States of America15/5 if more than 10% of votes10/0 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 services0

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.

*The gross income derived from sources within the Republic, for technical assistance provided by any non-Cyprus resident person, is subject to 10% withholding tax. Such income is exempt from withholding tax if the services are provided by a permanent establishment in Cyprus.

*The gross income derived by an individual non-resident in Cyprus, from the exercise of any profession or vocation in Cyprus or of public entertainers not resident in the Republic, and the gross receipts of any theatrical or musical or other group of public entertainers, including football clubs and other athletic missions from abroad, derived from performances in the Republic is subject to 10% withholding tax.

*The gross income derived within the Republic by a non-resident person that has no permanent establishment in Cyprus in relation to services performed in the Republic with respect to the extraction, exploration or exploitation of the continental shelf, subsoil or natural resources, as well as the installation and exploitation of pipelines and other installations on the ground, the seabed or above the surface of the sea, is subject to 5% withholding tax.

Paid from Cyprus
CountryRoyalties*Rights used within Cyprus(%)
Armenia5
Austria0
Bahrain (The treaty is effective from 01/01/2017)0
Belarus5
Belgium0
Bosnia The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies10/5 on cinematographic film royalties
Bulgaria10/5 on cinematographic film royalties
Canada10/5 on cinematographic film royalties / 0 on literary, dramatic musical or artistic work with the exception of films used for television programs
China10/5 on cinematographic film royalties
Czech Republic0/10 on patents, trademarks, designs, models, plans, secret formulas or processes, computer software or industrial, commercial, or scientific equipment, of for information concerning industrial, commercial or scientific experience.
Denmark0
Egypt10/5 on cinematographic film royalties
Estonia0
Finland0
France0/5 on films including films used for television programs
Germany0
Greece0/5 on film royalties (except films shown on TV)
Guernsey The treaty is effective from 01/01/2016)0
Hungary0
Iceland5
India10/5 on cinematographic film royalties
Ireland0/5 on film royalties (except films shown on TV)
Italy0
Kuwait5
Latvia0 if payer is a company that is resident in Cyprus and the beneficial owner of the income is a company (other than partnership) that is resident in Latvia / 5 for all other cases
Lebanon0
Lithuania5
Malta10/5 on cinematographic film royalties
Mauritius0
Moldova5
Montenegro (The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia applies)10/5 on cinematographic film royalties
Norway0
Poland5
Portugal10/5 on cinematographic film royalties
Qatar5
Romania5/0 if paid to the Government of the other State or to a financial institution
Russia0
San Marino0
Serbia (The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia still applies)10/5 on cinematographic film royalties
Seychelles5
Singapore10/5 on cinematographic film royalties
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
Slovenia5
South Africa0
Spain0
Sweden0
Switzerland (The treaty is effective from 01/01/2016)0
Syria10/5 on cinematographic film royalties
Thailand5 for any copyright of literary, dramatic, musical, artistic, or scientific work / 10 on right to use industrial, commercial or scientific equipment
Ukraine5 for any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience / 10 will be levied in all other cases.
United Arab Emirates0
United Kingdom0/5 on films including films used for television programs
United Sates of America0

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

Full Text

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

Cyprus – AustriaCyprus – Lebanon
Cyprus – Austria Final ProtocolCyprus – Macedonia
Cyprus – BelarusCyprus – Malta
Cyprus – BelgiumCyprus – Mauritius
Cyprus – BulgariaCyprus – Moldova
Cyprus Bulgaria Final ProtocolCyprus – Montenegro
Cyprus – CanadaCyprus – Poland
Cyprus – Peoples Republic of ChinaCyprus – Portugal
Cyprus – CroatiaCyprus – Romania
Cyprus – CzechoslovakiaCyprus – Russian Federation
Cyprus – DenmarkCyprus – Serbia
Cyprus – EgyptCyprus – Singapore
Cyprus – FranceCyprus – Slovenia
Cyprus – France Final ProtocolCyprus – South Africa
Cyprus – GermanyCyprus – South Africa Final Protocol
Cyprus – Germany Final ProtocolCyprus – Sweden
Cyprus – GreeceCyprus – Tajikistan
Cyprus – HungaryCyprus – Syria
Cyprus – Hungary Final ProtocolCyprus – Thailand
Cyprus – IndiaCyprus – Thailand Final Protocol
Cyprus – IrelandCyprus – Turkmenistan
Cyprus – ItalyCyprus – UK
Cyprus – Italy Final ProtocolCyprus – Ukraine
Cyprus – KurkystanCyprus – USA
Cyprus – KuwaitCyprus – Uzbekistan

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