The government of the Republic of Cyprus recognizing the importance of the network of Double tax conventions which supersede local tax legislation as a useful tax-planning tool, has been using its best endeavours to increase the number of bilateral double taxation treaties (DTTs), and hence enhance the Cypriot economy through foreign investment.
Currently Cyprus has signed over 60 DTTs, making Cyprus a very appealing jurisdiction to foreign investors and entrepreneurs, and therefore maintains the status of the island as a leading commercial and corporate financial hub.
The latest Cyprus DTT were signed with Barbados, the Duchy of Luxembourg and the Republic of San Marino.
The DTT between Cyprus and Barbados was signed on 03 May 2017 and was published in Cyprus Official Gazette on 12 May 2017.
The Cyprus – Luxembourg DTT was signed on 8 May 2017, in Nicosia by the Ministers of Finance of the two countries.
Finally, the Minister of Foreign Affairs of Cyprus and the Minister of Foreign Affairs of San Marino signed the Convention for the Avoidance of Double Taxation between Cyprus and San Marino on 19 May 2017.
In summary the above tax treaty agreements are based on the OECD Model Convention and their provisions include zero withhold taxes on dividend, interest and royalty payments.
Apart from the standard provisions on taxes the DTTs also include clauses for the exchange of financial and other information in accordance with the OECD model.
The DTTs are expected to enter into force upon the completion of the formal ratification procedures of each party and will have effect in both contracting states on or after 1 January following the date the treaty enters into force.
All DTTs are expected to further develop the economic and trade links between the Cyprus and the relevant treaty country and enhance business relationship, further attracting foreign investments into and from Cyprus.
For further tax guidance and information on international tax planning please contact Charles Savva at email@example.com.