Double Taxation Treaties
The development of international trade has increased the issue of double taxation and many countries have entered into agreements with other countries in order to limit taxation. A double taxation treaty enables the offsetting of tax paid in one country against the tax payable in another thus preventing double taxation although the rates and exemptions vary from one country to another. As of January 2010 Cyprus had entered into 45 double taxation agreements, these are listed in the table below. Although Cyprus has fewer DTT’s than some competing EU jurisdictions they are, in many cases, more beneficial such as those with Russia, Eastern Europe and the Middle East.
A significant number of double tax treaties concluded by Cyprus lowers and in some cases eliminates, foreign withholding taxes on dividends, interest, royalties or capital gains. Tax sparing credits (see below) are also prevalent in some jurisdictions.
A list of Double Taxation Agreements which have been concluded and their respective date of enforcement can be found below.
|Jurisdiction||Entry into force date|
* The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is still in force.
** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in force. The treaty has ceased to apply between Cyprus and Czech Republic as from 01/01/2010 (date of application for the provision of the new agreement).
*** The treaty between Cyprus and the Union of Soviet Socialist Republics is still in force.
Tax Sparing Credits:
Tax sparing is a tax treaty provision whereby the contracting state agrees to grant relief from from resident taxation with respect to source taxes that have not actually been paid (taxes that have been ‘spared’). Tax sparing provisions can provide significant scope for international tax planning.
Tax sparing credit provisions can be found in the treaties concluded with the following countries;
Canada, China, Czech Republic, Slovakia, Denmark, Egypt, Germany, Greece, India, Ireland, Italy, Malta, Mauritius, Poland, Romania, Russia, Syria, Thailand, UK, Yugoslavia.
The taxes that are all or partly spared are as follows:
- Tax on interest paid on loans for economic development in Cyprus (Canada, Denmark, Germany, France, UK).
- Tax relieved because of deductions in respect of investment in Cyprus (Canada, UK).
- Tax on interest or profits which is unpaid because of tax incentives, reliefs or exemptions in Cyprus (Czech Republic, Greece, Ireland, Romania, Slovakia, Yugoslavia).
- Tax not withheld on dividends (15%) if the exemption is given for the purpose of economic development in Cyprus (Denmark, Germany, France).
If you require a copy of the double taxation agreements between Cyprus and any of the above countries please contact us.
Crypto-currency Start-ups Buying False Reviews is Destablising Reputable Investment Sources
When cryptocurrency issuers want reviews for their coins, reports have surfaced that several prominent companies have been found offering money to advertisers in exchange for positive appraisals.
Is the Era of Shell Companies Coming to an End?
The Honourable Dr. Orlando Smith, Premier and Minister of Finance has announced that the BVI Government will take all reasonable steps to address European Union concerns about economic substance and a new Legislation is intended to be in force by the end of December 2018 in order to avoid the European Union Black List of Tax Heaven Jurisdictions.
Regulatory Update: BVI Economic Substance Act 2018
In 2016, the Council of the EU pledged to start advocating tax transparency and fairer taxation within Europe and consequently worldwide. After the EUs Code of Conduct Group (COCG) on taxation investigated BVI practices, they found a number of concerns regarding legitimate substance requirements for companies and limited partnerships doing business in and through BVI.
Information on the Payment of Cyprus Taxes for Pensions & Rental Income
Cyprus employees who are considered to have tax resident status, pay tax on their global income. Employees not considered to be tax resident are only charged for specific types of income that are originating from Cyprus-based sources.
Cyprus Regulatory Update: Shell Company Definition & Exceptions
The Central Bank of Cyprus has released new guidance for all credit institutions on the island, refining the definition for shell companies and subsidiary entities; coming into effect from November 2018, which are detailed as follows:
Singapore Variable Capital Company VCC: New Features & Benefits
The introduction of the VCC is a significant positive for the Singapore funds industry. Its aim is to retain Singapore as an attractive business destination and to keep investors wishing to domicile locally.
Consolidated Accounts for Hong Kong Companies: Subsidiary Requirements
As per Hong Kong company’s ordinance subdivision 3 section 379 subsection 1, a Company Director will have to prepare year-end financial accounts that comply with sections 380 and 383.
Challenges of Our Time: Cryptocurrencies & Their Regulation
The very concept of cryptocurrencies derives from technologies and the creation of alternatives to existing payment systems, which for the most part is caused by the negative consequences of financial crises and the injustice within the sphere of financial and legal regulation. Many people are convinced that the cryptocurrency is likely to become an alternative to the established global financial system and open new opportunities to those segments of the population and citizens of those countries that are deprived of the opportunity to work with the banking financial system.