Double Tax Agreement Cyprus

Double Tax Agreement Cyprus – All You Need to Know

Cyprus is a hotspot for companies looking to expand their business internationally. One of the key advantages of setting up a company in Cyprus is its Double Tax Agreement (DTA) network. In this article, we’ll cover all you need to know about the Double Tax Agreement Cyprus has established with other countries.

What is a Double Tax Agreement?

A Double Tax Agreement (DTA) is a treaty signed between two countries to avoid double taxation on income or capital gains. The aim of the treaty is to prevent individuals or companies from paying tax twice on the same income. By agreeing to a DTA, both countries mutually agree to grant tax relief and foreign tax credit to their taxpayers.

Cyprus has an extensive network of DTAs with more than 60 countries worldwide, making it a popular destination for companies seeking to establish an international presence.

Double Tax Agreement Cyprus – Advantages

The DTA between Cyprus and other countries grants several advantages to taxpayers. Some of the key benefits include:

1. Avoidance of double taxation: The Cyprus DTA ensures that taxpayers will not be taxed twice on the same income or capital gains. This means that companies operating in Cyprus can benefit from reduced tax liabilities and increased profitability.

2. Reduction of withholding tax: Withholding tax is the amount of tax deducted from a payment made to a non-resident. The DTA between Cyprus and other countries reduces the withholding tax rate on dividends, interest, and royalties to a maximum of 5%. This allows companies to retain more of their earnings, making Cyprus an attractive destination for international investment.

3. Protection against discrimination: The Cyprus DTA provides protection against discrimination for taxpayers operating in other countries. This means that Cypriot companies can operate on a level playing field with local businesses, without being subject to higher taxes or unfavorable treatment.

Double Tax Agreement Cyprus – Countries Covered

The Double Tax Agreement Cyprus has established covers more than 60 countries worldwide. Some of the key countries covered by the DTA include:

1. United Kingdom: The DTA between Cyprus and the UK has been in place since 1974. It covers all aspects of income tax and capital gains tax, including taxation of dividends, interest, and royalties.

2. Russia: The DTA between Cyprus and Russia is one of the most extensive agreements in place. It covers all aspects of income and capital gains taxation and provides significant benefits to both countries.

3. India: The DTA between Cyprus and India is another important agreement, covering all aspects of income tax and capital gains tax. The agreement provides significant benefits to Indian companies looking to invest in Cyprus.

Double Tax Agreement Cyprus – Conclusion

In conclusion, the Double Tax Agreement Cyprus has established with other countries is a key advantage for companies looking to expand their business internationally. By avoiding double taxation and reducing withholding tax rates, the DTA allows companies to retain more of their earnings, making Cyprus an attractive destination for international investment. With over 60 countries covered, the DTA between Cyprus and other countries is comprehensive and provides significant benefits to taxpayers.

This entry was posted in Uncategorized by admin. Bookmark the permalink.

Comments are closed.