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Cyprus/September 2014

Cyprus, which has been long established as a solid economic and business centre worldwide, seeks to reinforce its title as a beneficial investment hub by expanding its double tax treaty network and creating stronger economic and trade relations with other Contracting States.

Double Taxation Agreement between Cyprus and Lithuania

In June 21st, 2013, Cyprus and Lithuania signed their first Double Tax Treaty. Since then, they ratified their Agreement and the new Agreement will enter into force on the 1st day of January 2015.

In summary the new provisions of the ratified agreement are:

Dividends:  No withholding tax (0%) where the recipient is a company and

–  is the beneficial owner of the dividends

– owns at least (minimum) 10 % capital of the company;  in a different case a 5% withholding tax shall be applicable

Interest:  No withholding tax (0%)

Royalties:5% withholding tax provided that the recipient is be the beneficial owner

Capital Gains:  gains, resulting from the disposal of shares, are taxable in the country in which the alienator of the shares is tax resident

Double Taxation Agreement between Cyprus and Guernsey

On 15 July 2014 Cyprus and Guernsey signed a double taxation avoidance Agreement, which will enter into force upon the ratification of the Agreement by the two Contracting States. The Agreement is based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.

Briefly the main provisions of the Agreement between the two Contracting States:

Dividends: 0% withholding tax

Interest: 0% withholding tax

Royalties: 0% withholding tax

Capital Gains: – gains, resulting by a resident of one of the two countries (ex. A), from the disposal of immovable property in the other country (ex. B), will be taxed in the country where immovable property is situated (ex. B).

– gains, resulting from the disposal of shares, are taxable in the country in which the alienator of the shares is tax resident.

Zoe Kokoni
zoe.kokoni@eurofast.eu
Tel: +357 22 699 222
www.eurofast.eu