On May 2017 an agreement was signed between the Republic of Cyprus and Barbados for the avoidance of double taxation. This double tax treaty is based on the general model of the Organisation for Economic Co-operation and Development (OECD). The ratifications of the treaty were finalised and the double tax treaty entered into force on 1 January 2018.
The main provisions of the agreement are as follows:
Permanent Establishment: The permanent establishment describes a building site, a construction, assembly or installation project or supervisory activities in connection therewith, and is considered as a ‘permanent establishment’ only if it lasts longer than 6 months.
Dividends: The double tax agreement eliminates withholding taxes on dividends, interest and royalties paid by a resident of one country to a resident of the other, as long as the royalties and interest are no more than would apply on an arm's-length principle.
Capital gains: Capital gains derived by the disposal of immovable property and sale of shares of companies are taxed in the country where the seller is located.
Withholding taxes: There is 0% withholding tax on
- Dividends
- Interest
- royalties
Our tax experts can provide you with further detailed information and tax advice, regarding the above tax treaty and the extensive network of double tax treaty agreements that have been signed by Cyprus government now equating to over 60. For further information please contact Mr Charles Savva at c.savva@savvacyprus.com.
