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Double Tax Treaties in Cyprus

The Cyprus government’s fiscal policy clearly embraces tax incentives for foreigners, which act as a considerable inducement for those wishing to conduct international business on the island. One of the simplest indicators of this intention is the high number of double taxation treaties that Cyprus has executed with other countries.

Double taxation treaties operate as vehicles for international business because they are an important tool in facilitating the appeal of commercial transactions within a jurisdiction and give considerable advantage to those undertaking business in participating countries by offering certainty and constancy.

Double taxation occurs when two different countries charge one person (legal or natural) tax on the same financial transaction. In the interests of equity, this effect is mitigated by jurisdictions that execute double taxation treaties.

A double taxation treaty will usually operate by allowing a credit to be issued against the taxes due in the taxpayer’s resident country for the taxes paid in the other treaty country. The effect of this is that the taxpayer pays no more in tax on the transaction than the higher of the two jurisdiction’s rates.

Cyprus has executed almost 50 such treaties, most of which follow the OECD (Organization of Economic Cooperation and Development) model that is amended where necessary to conform to the various jurisdictions concerned. The US agreement is a notable exception that follows the US Model.

The countries with which Cyprus has signed a double tax treaty are as follows:[1]

 

 

State

Date of entry

into force

Austria

10 Nov 1990

Bulgaria

3 Jan 2001

Belarus

12 Feb 1999

Belgium

8 Dec1999

Canada

3 Sep1985

China

5 Oct 1991

Denmark

Treaty

Notes

New Agreem.*

10 Aug 1981

10 Apr 1982

7 Sept 2011

Egypt

14 Mar1995

France

1 April 1983

Germany

new Agreement

11 Oct 1977

16 Dec 2011

Greece

16 Jan 1969

Hungary

24 Nov 1982

India

21 Dec 1994

Ireland

12 Jul1970

Italy

Treaty

Protocol

(Additional Protocol)

9 June 1983

Kuwait

(New Agreement)

25 Sep 1986

Lebanon

14 Apr 2005

Malta

11 Aug 1994

Mauritius

12 Jun 2000

Norway

1 Jan 1955

Poland

9 Jul 1993

Romania

8 Nov 1982

Russia

(Amendment Protocol)

17 Aug 1999

South Africa

8 Dec1998

Sweden

14 Nov1989

Syria

22 Feb 1995

Singapore

8 Feb 2001

Thailand

4 April 2000

United Kingdom

Treaty

Protocol

1 Nov1974

USA

31 Dec 1985

Serbia*

8 Sep1986

Montenegro*

5 Nov 2008

Slovenia*

(New Agreement)

8 Sep 1986

14 Sept 2011

Slovakia**

30 Dec 1980

Chech Republic**

(new

agreement)

30 Dec 1980

26 Nov 2009

Ajerbaizan***

26 Aug 1983

Armenia

19 Sept 2011

Kyrgyzstan***

26 Aug 1983

Moldavia

03 Sept 2008

Tanzikistan***

26 Aug 1983

Uzbekistan***

26 Aug 1983

Ukraine***

26 Aug 1983

Seychelles

27 Oct 2006

San Marino

18 July 2007

Quatar

20 Mar 2009

United Arab Emirates

Pending

Notes

*7 Denmark – The existing Convention shall cease to have effect as from 1.1.2012

* The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is

still in force. It shall cease to apply between Cyprus and Slovenia as from 1.1.2012

 

** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in

force.The said treaty has ceased to apply between Cyprus and Chech Republic as

from 1.1.2010, date of application of the provision of the new agreement.

 

***The treaty between Cyprus and the Union of Soviet Socialist Republics

is still in force.



[1] As listed by the Ministry of Finance at www.mof.gov.cy/mof