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Cyprus Double Tax Treaties

Cyprus is a signatory to a treaty for the Prevention of Double Taxation with many countries all over the world. A Double Taxation Prevention Treaty, in principle, enables offsetting tax paid in one of two countries against the tax payable in the other, in this way preventing double taxation.

The following table summarises the withholding tax rates applicable

Double Tax Treaties - Notes

Dividends, interest and royalties are paid by a Cyprus International Business Company without any withholding tax in all cases.

  • 1. Under the Cyprus legislation there is no withholding tax on dividends, interest, royalties paid to non-residents of Cyprus.
  • 2. In the case where the royalties are earned on rights used within Cyprus there is a withholding tax of 10%.
  • 3. 5% on film and TV royalties.
  • 4. Nil if paid to a Government or for export guarantee.
  • 5. Nil on literary, dramatic, musical or artistic work.
  • 6. Nil if paid to the Government of the other state.
  • 7. This rate applies for patents, trademarks, designs or models, plans, secret formulas or processes, or any industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
  • 8. 15% if received by a company controlling less than 25% of the voting power.
  • 9. 15% if received by a company controlling less than 10% of the voting power.
  • 10. Nil if paid to a Government, bank or financial institution.
  • 11. The treaty provides for withholding taxes on dividends but Greece does not impose any withholding tax in accordance with its own legislation.
  • 12. 5% on film royalties.
  • 13. 5% if received by a company controlling less than 50% of the voting power.
  • 14. This rate applies to individual shareholders regardless of their percentage of shareholding. Companies controlling less than 10% of the voting shares are also entitled to this rate.
  • 15. 10% for payments of a technical, managerial or consulting nature.
  • 16. Treaty rate 15% therefore restricted to Cyprus legislation rate.
  • 17. 10% if dividend paid by a company in which the beneficial owner has invested less than US$100.000.
  • 18. If investment is less than 200.000 euro, dividends are subject to 15% withholding tax, which is reduced to 10% if the recipient company controls 25% or more of the paying company.
  • 19. No withholding tax for interest on deposits with banking institutions.
  • 20. Armenia, Azerbaijan, Kyrgyzstan, Moldova, Tajikistan, Ukraine and Uzbekistan apply the USSR/Cyprus treaty.
  • 21. 10% on interest received by a financial institution or when it relates to sale on credit of any industrial, commercial or scientific equipment or of merchandise.
  • 22. This rate applies for any copyright of literary, dramatic, musical, artistic or scientific work. A 10% rate applies for industrial, commercial or scientific equipment. A 15% rate applies for patents, trade marks, designs or models, plans, secret formulas or processes.
  • 23. This rate applies to companies holding directly at least 25% of the share capital of the company paying the dividend. In all other cases the withholding tax is 10%.
  • 24. This rate does not apply if the payment is made to a Cyprus International Business Company by a resident of Bulgaria owning directly or indirectly at least 25% of the share capital of the Cyprus entity. This provision is now ineffective since the Cyprus tax regime does not allow for International Business Companies as from 1 January 2003. The transitional period for existing international business companies expires on 31 December 2005.
  • 25. 7% if paid to bank or financial institution.
  • 26. The new countries of Czech Republic and Slovakia have agreed to be bound by the treaty, which was entered into with Czechoslovakia.
  • 27. Slovenia, Montenegro, Serbia apply the Yugoslavia/Cyprus Treaty.
  • 28. In addition to the treaties in force, treaties with the following countries have reached the following stage:
  • Negotiations in progress: Finland, Algeria, Spain, Sri Lanka, Ukraine, Bangladesh, Indonesia, Estonia, Lithuania, Latvia, Malaysia, Moldova, Netherlands, Iran, Kazakhstan and Libya.
  • Negotiations will commence soon: Brazil, Georgia, Jordan, Morocco, Vietnam, Gabon, Portugal, Seychelles and Slovenia.
  • Negotiations for revision of existing agreements: Czech Republic, Denmark, Ireland, Norway, Yugoslavia, Armenia, Italy, Germany and France.