Monday, 12 June 2017 11:56

Cyprus Double Taxation Avoidance Agreements (DTAAs) effective from 1 January 2018

cy 2

May 2017

The tax treaties signed between Cyprus and Iran and Cyprus and Jersey enter into force as of 1 January 2018, a development which further enhances Cyprus positioning as a preferred hub for international investments and tax planning.

Regarding tax treaty with Iran visit our earlier publication for details:

Cyprus signs off a Double Taxation Avoidance Agreement (DTAA) with Iran - August 2015

The main provisions regarding tax treaty with Jersey are analyzed below:

Permanent Establishment

Based on the new treaty the definition of permanent establishment also includes a building site or construction or installation project or any supervisory activities in connection with such site or project constitutes a permanent establishment only if it lasts more than 12 months (definition in compliance with OECD model).

Dividends

The withholding tax rate is set at 0%

Interest

The withholding tax rate on interest is set at 0%.

Royalties

The withholding tax rate on royalties is set at 0%.

Capital gains

Gains from the disposal of immovable property are taxed in the country where the immovable property is situated. Capital gains arising from the disposal of shares deriving more than 50% of their value directly or indirectly from immovable property in the other Contracting State may be taxed in that other State. Other capital gains from the alienation of any other property are taxable only in the place of residence of the alienator.