Cyprus Double Tax Treaties

KPSA - Chartered Accountants

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 (DTT), 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 tables summarises the withholding tax rates applicable:

 

Received in Cyprus

Dividends

Interest

Royalties

%

%

%

1

Andorra (47)

0

0

0

2

Armenia

0/5 (32)

5 (33)

5

3

Austria

10 (46)

0

0

4

Azerbaijan (27)

0

0

0

5

Bahrain

0

0

0

6

Barbados

0

0

0

7

Belarus

5/10/15 (4)

5

5

8

Belgium

10/15 (1) (46)

0/10 (16) (46)

0

9

Bosnia (28)

10

10

10

10

Bulgaria

5/10 (19) (46)

0/7 (20) (25) (46)

10 (20) (46)

11

Canada

15

0/15 (8)

0/10 (11)

12

China

10

10

10

13

Czech Republic

0/5 (30) (46)

0

0/10 (48)

14

Denmark

0/15 (34)

0

0

15

Egypt

15

15

10

16

Estonia

0

0

0

17

Ethiopia

5

5

5

18

Finland

5/15 (37) (46)

0

0

19

France

10/15 (7) (46)

0/10 (9) (46)

0/5 (26)

20

Georgia

0

0

0

21

Germany

5/15 (2) (46)

0

0

22

Greece

25 (46)

10 (46)

0/5 (12)

23

Guernsey

0

0

0

24

Hungary

5/15 (1) (46)

0/10 (8) (46)

0

25

Iceland

5/10 (39)

0

5

26

India

10 (49)

0/10 (50)

10 (51)

27

Iran

5/10 (19)

5

6

28

Ireland

0

0

0/5 (12)

29

Italy

15 (46)

10 (46)

0

30

Jersey

0

0

0

31

Kuwait

0

0

5

32

Kyrgyzstan (27)

0

0

0

33

Latvia

0/10 (42)

0/10 (42)

0/5 (43)

34

Lebanon

5

5 (16)

0

35

Lithuania

0/5 (40)

0

5 (46)

36

Luxembourg (52)

0/5 (35)

0

0

37

Malta

0 (22)

10 (46)

10

38

Mauritius (53)

0

0

0

39

Moldova

5/10 (19)

5

5

40

Montenegro (28)

10

10

10

41

Norway

0/15 (3)

0

0

42

Poland

0/5 (36)

0/5 (8) (46)

5 (46)

43

Portugal

10 (46)

10 (46)

10 (46)

44

Qatar

0

0

5

45

Romania

10 (46)

0/10 (8) (46)

0/5 (54) (46)

46

Russia

5/10 (6)

0

0

47

San Marino (53)

0

0

0

48

Saudi Arabia (55)

0 (44)

0

5 (45)

49

Serbia (28)

10

10

10

50

Seychelles

0

0

5

51

Singapore

0

0/7/10 (8) (23)

10

52

Slovakia (29)

10 (46)

0/10 (8) (46)

0/5 (15) (46)

53

Slovenia

5 (46)

5 (46)

5 (46)

54

South Africa

5/10 (41)

0

0

55

Spain

0/5 (35)

0

0

56

Sweden

5/15 (1) (46)

0/10 (8) (46)

0

57

Switzerland

0/15 (38)

0

0

58

Syria

0/15 (1)

10 (8)

15 (13)

59

Thailand

10

10/15 (17)

5/10/15 (18)

60

Ukraine

5/15 (21)

2

5/10 (15)

61

United Arab Emirates

0

0

0

62

United Kingdom (31)

0/15 (24)

0

0

63

United States of America

5/15 (5)

0/10 (10)

0

64

Uzbekistan (27)

0

0

0

1. 15% if received by a company controlling less than 25% of the voting power

2. 5% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

3. NIL 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 dividend or if the beneficial owner of the shares is the Government of Cyprus or Norway. 15% in all other cases.

4. A WHT rate of 5% applies where the investment is not less than €200.000 in the share capital of the company paying the dividend. If such investment is less than €200.000, dividends are subject to 15% WHT which is reduced to 10% if the recipient company controls 25% or more of the paying company.

5. 5% if received by a company controlling at least 10% of the voting power. 15% in all other cases.

6. 10% if received by company, which has invested less than €100.000.

7. A WHT rate of 10% applies if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

8. NIL if paid to the Government/Central Bank/Public Authority.

9. NIL if paid to the Government of the other State or in connection with 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 is guaranteed from government or other governmental organisation.

10. NIL 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.

11. NIL on literary, dramatic, musical or artistic work with the exception of films used for television programs.

12. 5% on film royalties (except films shown on TV).

13. 10% on literary, musical, artistic work, films and TV royalties.

14. NIL on literary, artistic or scientific work including films.

15. 5% on royalty payments in respect of any copyright of scientific work any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% in all other cases.

16. NIL if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits.

17. 10% on interest received by financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale or merchandise between two companies.

18. 10% on right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs, models, plans, secret formulas or processes.

19. The WHT rate of 5% applies if the dividend is received by a company owning directly at least 25% of the capital of the company paying divided. 10% in all other cases.

20. 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 interest/royalties and the Cyprus company pays less than the normal rate of tax.

21. 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. 15% in all other cases.

22. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid.

23. 7% if paid to a bank or similar financial institution. NIL if paid to the government.

24. The treaty provides for 15% withholding tax for dividends paid by certain investment vehicles out of income derived, directly or indirectly, from tax exempt immovable property income.

25. NIL if paid to or is guaranteed by the Government, statutory body, the Central Bank.

26. 5% on film royalties, including films used for television programs.

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

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

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

30. NIL 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. 5% in all other cases.

31. The treaty is effective from March 1st, 2019 and applied on taxes from 1st January 2020 onwards.

32. The WHT rate of 5% applies if the beneficial owner has invested in the capital of the company less than the equivalent of €150.000 at the time of the investment.

33. NIL if paid to the Government or to a local authority, or to the Central Bank.

34. NIL 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.

NIL 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.

NIL 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. 15% in all other cases.

35. NIL 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% in all other cases.

36. NIL 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% in all other cases.

37. 5% if the dividend is received by a company (other than a partnership) which controls directly at least 10% of the voting power in the company paying the dividends. 15% in all other cases.

38. NIL if the beneficial owner is:

a. 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.

b. a pension fund or other similar institution recognised as such for tax purposes, or

c. the Government, a political subdivision, local authority or central bank of one of the two contracting states. 15% in all other cases.

39. 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. 10% in all other cases.

40. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% on the capital of the company paying the dividends. 5% in all other cases.

41. 5% if the dividend is received by a company which holds at least 10% of the capital of the company paying the dividend. 10% in all other cases.

42. NIL if the beneficial owner is a company (other than a partnership). 10% in all other cases.

43. NIL if the beneficial owner is a company (other than a partnership). 5% in all other cases.

44. NIL if the beneficial owner is a company which holds directly or indirectly at least 25% of the capital of the company paying the dividends. 5% in all other cases.

45. 5% on royalties for the use of, or the right to use, industrial, commercial or scientific equipment. 8% in all other cases.

46. An exemption from withholding tax on dividends may be available if the conditions for the application of the EU parent-subsidiary directive are satisfied. An exemption from withholding tax on interest may also be available if the conditions for the application of the EU interest and royalties directive are satisfied.

47. The first-time DTT between Cyprus and Andorra signed on 18 May 2018 and entered into force on 11 January 2019. Based on the provisions of the DTT, it will take effect as from 1 January 2020.

48. 10% WHT applies for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.

49. Prior to 1 April 2017, the applicable WHT rate is 15% if received by a company holding less than 10% of the shares of the paying company and in all cases if received by an individual.

50. Nil if paid to a government or any other institution agreed upon between the two States. Prior to 1 April 2017, nil rate also applies if paid to a bank or financial institution. 10% WHT rate applies in all other cases.

51. A WHT rate of 10% is also applicable for payments of a technical, managerial, or consulting nature. Prior to 1 April 2017, a rate of 15% applies on royalties

52. The first-time DTT between Cyprus and Luxembourg signed on 8 May 2017 is effective as from 1 January 2019.

53. The treaty/treaty amendments is/are effective as from 1 January 2019.

54. 5% WHT 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.

55. The first-time DTT between Cyprus and Saudi Arabia signed on 3 January 2018 will enter into force on 1 March 2019. Based on the provisions of the DTT, it will take effect as from 1 January 2020.

56. A WHT rate of 5% if received by a company holding less than 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 shares.

 

Paid from Cyprus

Dividends

Interest

Royalties

%

%

%

Non-treaty countries

0

0

0*

1

Andorra (31)

0

0

0

2

Armenia

 0 (32)

 5 (33)

5

3

Austria

10

0

0

4

Bahrain

0

0

0

5

Barbados

0

0

0

6

Belarus

5 (4)

5

5

7

Belgium

10 (1)

10

0

8

Bulgaria

5 (19)

7 (25)

10

9

Canada

15

15 (8)

10 (11)

10

China

10

10

10

11

Czech Republic

0 (30)

0

10

12

Denmark

0 (34)

0

0

13

Egypt

15

15

10

14

Ethiopia

5

5

5

15

Estonia

0

0

0

16

Finland

5 (37)

0

0

17

France

10 (7)

10 (9)

0 (26)

18

Georgia

0

0

0

19

Germany

5 (2)

0

0

20

Greece

25

10

0 (12)

21

Guernsey

0

0

0

22

Hungary

0

10 (8)

0

23

Iceland

5 (39)

0

5

24

India

10

10 (8)

10

25

Iran

5 (19)

5

6

26

Ireland

0

0

0 (12)

27

Italy

0

10

0

28

Jersey

0

0

0

29

Kuwait

10

10 (8)

5 (14)

30

Kyrgyzstan (27)

0

0

0

31

Latvia

0 (42)

0 (42)

0 (43)

32

Lebanon

5

5 (16)

0

33

Lithuania

0 (40)

0

5

34

Luxembourg

0 (35)

0

0

35

Malta

15

10 (8)

10

36

Mauritius

0

0

0

37

Moldova

5 (19)

5

5

38

Montenegro (28)

10

10

10

39

Norway

0

0

0

40

Poland

0 (36)

5 (8)

5

41

Portugal

10

10

10

42

Qatar

0

0

5

43

Romania

10

10 (8)

5 (14)

45

Russia

5 (6)

0

0

46

San Marino

0

0

0

47

Saudi Arabia (31)

 0 (44)

0

5 (45)

48

Serbia (28)

10

10

10

49

Seychelles

0

0

5

50

Singapore

0

10 (23)

10

51

Slovakia (29)

10

10 (8)

5 (14)

52

Slovenia

5

5 (33)

5

53

South Africa

10 (41)

0

0

54

Spain

0

0

0

55

Sweden

5 (1)

10 (8)

0

56

Switzerland

0 (38)

0

0

57

Syria

0 (1)

0 (8)

15 (13)

58

Tajikistan (27)

0

0

0

59

Thailand

10

5 (17)

5 (18)

60

Ukraine

5 (21)

5

5 (15)

61

United Arab Emirates

0

0

0

62

United Kingdom (26)

0

10

0 (26)

63

USA

0

10 (10)

0

64

Uzbekistan (27)

0

0

0

 

*  10% in the case of royalties granted for use within the Republic. 5% on film and TV rights.

1. 15% if received by a company controlling less than 25% of the voting power.

2. 5% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

3. NIL 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 dividend. 15% in all other cases.

4. 5% if the amount invested by the beneficial owner is over €200.000 irrespective of the % of voting power acquired. 10% is imposed if received by a holder of at least 25% of the share capital of the paying company. Otherwise the rate is 15%.

5. 5% if received by a company controlling at least 10% of the voting power. 15% in all other cases.

6. 10% if received by company, which has invested less than €100.000.

7. 10% if received by a company controlling more than or equal to 10% of the capital. 15% in all other cases.

8. NIL if paid to the Government of the other State.

9. NIL if paid to the Government of the other State or in connection with 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 is guaranteed from government or other governmental organisation.

10. NIL 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.

11. NIL on literary, dramatic, musical or artistic work with the exception of films used for television programs.

12. 5% on film royalties (except films shown on TV).

13. 10% on literary, musical, artistic work, films and TV royalties.

14. NIL on literary, artistic or scientific work including films.

15. 5% on royalty payments in respect of any copyright of scientific work any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% in all other cases.

16. NIL if paid to the Government of the other State, a political subdivision or a local authority, the National Bank or any institution the capital of which is wholly owned by the State or a political subdivision or a local authority or in the form of interest income from bank deposits.

17. 10% on interest received by financial institutions, on interest paid in connection with industrial, commercial, scientific equipment or the sale of merchandise between two companies.

18. 10% on right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience and 15% for patents, trademarks, designs, models, plans, secret formulas or processes.

19. 5% if the dividend is received by a company owning directly at least 25% of the capital of the company paying divided. 10% in all other cases.

20. 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.

21. 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 €100.000. 15% in all other cases.

22. The treaty provides that the tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid.

23. 7% if paid to a bank or similar financial institution. NIL if paid to the government.

24. 15% if dividends are paid out of income derived from immovable property by certain investment vehicles.

25. NIL if paid to or is guaranteed by the Government, statutory body, the Central Bank.

26. New treaty signed on 22 March 2018 that came into effect on 1 January 2019 with respect to withholding taxes.

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

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

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

30. NIL 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. 5% in all other cases.

31. The treaty has been signed but has not come into effect until the date of publication of this guide.

32. 5% if the beneficial owner has invested in the capital of the company less than the equivalent of €150.000 at the time of the investment.

33. NIL if paid to the Government or to a local authority, or to the Central Bank.

34. NIL 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.

NIL 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.

NIL 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. 15% in all other cases.

35. NIL 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% in all other cases.

36. NIL 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% in all other cases.

37. 5% if the dividend is received by a company (other than a partnership) which controls directly at least 10% of the voting power in the company paying the dividends. 15% in all other cases.

38. NIL if the beneficial owner is:

a. 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.

b. a pension fund or other similar institution recognised as such for tax purposes, or

c. the Government, a political subdivision, local authority or central bank of one of the two contracting states. 15% in all other cases.

39. 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. 10% in all other cases.

40. NIL if the beneficial owner is a company (other than a partnership) which holds directly at least 10% on the capital of the company paying the dividends. 5% in all other cases.

41. 5% if the dividend is received by a company which holds at least 10% of the capital of the company paying the dividend. 10% in all other cases.

42. NIL if the beneficial owner is a company (other than a partnership). 10% in all other cases.

43. NIL if the beneficial owner is a company (other than a partnership). 5% in all other cases.

44. NIL if the beneficial owner is a company which holds directly or indirectly at least 25% of the capital of the company paying the dividends. 5% in all other cases.

45. 5% on royalties for the use of, or the right to use, industrial, commercial or scientific equipment. 8% in all other cases.