The existing agreement signed between the Republic of Cyprus and the Republic of Mauritius for the avoidance of double taxation as well as the prevention of fiscal evasion with respect on taxes on income and capital has been revised. On 23 October 2017, in Pretoria, South Africa, the two countries signed an amending protocol that adds to the existing convention’s provisions for exchange of information.
The original agreement as well as the amendments follows the OECD model tax convention for the avoidance of double taxation on income and capital.
What follows is a quick summary of the key provisions of the Double Tax Treaty.
The permanent establishment definition in the treaty is in line with the meaning provided in the OECD model tax convention. In particular, any building site or construction or installation project constitutes a permanent establishment if it lasts more than 12 months.
Additionally, the furnishing of services (including consultancy services) by an enterprise of one state through employees or other personnel engaged in the other state, provided that such activities continue for the same or a connected project for a period or periods aggregating to more than 9 months within any 12 months period, will also be deemed to constitute a permanent establishment.
Withholding tax rate on dividend / interest / royalties payments
The withholding tax rate on the payment of dividends, interest and royalties is 0%.
Capital Gains Tax
Any gains from the disposal of immovable property shall be taxed in the country where the immovable property is situated.
Exchange of information
The Amending Protocol aligns the provisions on exchange of information regarding taxes in the current Agreement with the OECD Model Convention on the Avoidance of Double Taxation on Income.
Following the entry into force of the amending Protocol, an effective exchange of information based on the international tax model between the tax authorities of the two countries will become operational, and is expected to contribute further to the prevention of international tax evasion and tax abuse. The amended protocol will contribute to the further strengthening of trade and economic relations between the two States.
Our highly skilled Tax professionals can assist and provide you with guidance on the newly signed protocol as the double tax agreement.
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