Cyprus and Spain signed Double Tax Treaty

The Republic of Cyprus and Spain signed on 14th of February 2013, a new Double-Tax Treaty between the two countries.

The agreement was signed by the Ambassador of the Kingdom of Spain in Nicosia, Anna Salomon Perez and the Cypriot Minister of Finance, Mr. Vasos Shiarly.

The importance of this agreement is to facilitate investments from Spain to Cyprus and from Cyprus to Spain and strengthen economic relations between our two countries

The new Treaty is based on the OEDC Model Convention of 2010 and it incorporates the latest version of art.26 of the OEDC Model Convention on the exchange of information, illustrating Cyprus’ commitment to internationally accepted tax standards and transparency.

The main changes of the treaty are the below:

-        Dividend payments will be subject to a 5% withholding tax;

-        Interest payments will not be subject to any withholding tax;

-        Royalty payments will not be subject to any withholding tax;

-        Capital Gains from the direct sale of shares in «property-rich» companies are taxed in the country where the immovable property is situated.

The treaty will come into force on 1st of January of the year, following the completion of the ratification process by the Government of the two countries.

 

 

 

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