Tax Treaties Withholding Tax Tables
Introduction
'Cyprus', a well established international centre, has been critically assessed of constituting an attractive location for holding companies from a tax perspective, among others. This is due to the accession of Cyprus to the European Union (EU) and the enactment of the new Cyprus tax legislation, which is now compatible with the acquis communautaire. Cyprus laws and practices are now harmonised with the EU Laws and Directives, the Code of Conduct and the Organization for Economic Cooperation and Development's recommendation on Harmful Tax Corporation. Cyprus is an ideal location for establishing an international holding company, mainly due to the extensive network of double Tax Treaties.
The following tables give a summary of the withholding taxes provided by the double tax treaties entered into by Cyprus.
| |
|
Paid from countries shown below to residents of Cyprus |
Paid from Cyprus to residents of
the countries shown below |
| |
Treaty Countries |
Dividends % |
Interest % |
Royalties % |
Dividends % (1) |
Interest % (1) |
Royalties % (1) |
| 1 |
Austria |
10 |
Nil |
Nil |
10 |
Nil |
Nil |
| 2 |
Belarus |
5 (18) |
5 |
5 |
5 (18) |
5 |
5 |
| 3 |
Belgium |
10 (8) |
10 (6,19) |
Nil |
10 (8) |
10 (6,19) |
Nil |
| 4 |
Bulgaria |
5 (23) |
7 (6,24) |
10 (24) |
5 (23) |
7 (6) |
10 |
| 5 |
Canada |
15 |
15 (4) |
10 (5) |
15 |
15 (4) |
10 (5) |
| 6 |
China |
10 |
10 |
10 |
10 |
10 |
10 |
| 7 |
Czech Republic |
10 |
10 (6) |
10 (7) |
10 |
10 (6) |
5 (7) |
| 8 |
Denmark |
10 (8) |
10 (6) |
Nil |
10 (8) |
10 (6) |
Nil |
| 9 |
Egypt |
15 |
15 |
10 |
15 |
15 |
10 |
| 10 |
France |
10 (9) |
10 (10) |
Nil (3) |
10 (9) |
10 (10) |
Nil (3) |
| 11 |
Germany |
10 (8) |
10 (6) |
Nil (3) |
10 (8) |
10 (6) |
Nil (3) |
| 12 |
Greece |
25 (11) |
10 |
Nil (12) |
25 |
10 |
Nil (12) |
| 13 |
Hungary |
5 (8) |
10 (6) |
Nil |
Nil |
10 (6) |
Nil |
| 14 |
India |
10 (9) |
10 (10) |
15 (15) |
10 (9) |
10 (10) |
10 (16) |
| 15 |
Ireland |
Nil |
Nil |
Nil (12) |
Nil |
Nil |
Nil (12) |
| 16 |
Italy |
15 |
10 |
Nil |
Nil |
10 |
Nil |
| 17 |
Kuwait |
10 |
10 (6) |
5 (7) |
10 |
10 (6) |
5 (7) |
| 18 |
Malta |
Nil |
10 |
10 |
15 |
10 |
10 |
| 19 |
Mauritius |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 20 |
Norway |
Nil (13) |
Nil |
Nil |
Nil |
Nil |
Nil |
| 21 |
Poland |
10 |
10(6) |
5 |
10 |
10 (6) |
5 |
| 22 |
Romania |
10 |
10 (6) |
5 (7) |
10 |
10 (6) |
5 (7) |
| 23 |
Russia |
5 (17) |
Nil |
Nil |
5 (17) |
Nil |
Nil |
| 24 |
Singapore |
Nil |
10 (6,25) |
10 |
Nil |
10 (6.25) |
10 |
| 25 |
Slovakia |
10 |
10 (6) |
5 (7) |
10 |
10(6) |
5 (7) |
| 26 |
South Africa |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 27 |
Sweden |
5 (8) |
10 (6) |
Nil |
5 (8) |
10 (6) |
Nil |
| 28 |
Syria |
Nil(8) |
10(4) |
10 |
Nil(8) |
10 |
10 |
| 29 |
Thailand |
10 |
15 (21) |
5 (22) |
10 |
5 (21) |
5 (22) |
| 30 |
United Kingdom |
15 (14) |
10 |
Nil (3) |
Nil |
10 |
Nil (3) |
| 31 |
United States |
5 (9) |
10 (10) |
Nil |
Nil |
10 (10) |
Nil |
| 32 |
USSR (20) |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
| 33 |
Yugoslavia (26) |
10 |
10 |
10 |
10 |
10 |
10 |
|
Non-treaty countries |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Notes
- Under Cyprus legislation there is no withholding tax on dividends, interests and royalties paid to non-residents of Cyprus.
- In case where royalties are earned on rights used within Cyprus there is withholding tax of 10%.
- 5% on film and TV royalties.
- Nil if paid to a Government or for export guarantee.
- Nil on literary, dramatic, musical or artistic work.
- Nil if paid to the Government of the other state.
- This rate applies for patents, trademarks, designs or models, plans, secret formulas or processes, or any industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
- 15% if received by a company controlling less than 25% of the voting power.
- 15% if received by a company controlling less than 10% of the voting power.
- Nil if paid to a Government, bank or financial institution.
- The treaty provides for withholding taxes on dividends but Greece does not impose any withholding tax in accordance with its own legislation.
- 5% on film royalties.
- 5% if received by a company controlling less than 50% of the voting power.
- This rate applies to individual shareholders regardless of their percentage of shareholding. Companies controlling less than 10 per cent of the voting shares are also entitled to this rate.
- 10% for payments of a technical, managerial or consulting nature.
- Treaty rate 15%, therefore restricted to Cyprus legislation rate.
- 10% if dividend paid by a company in which the beneficial owner has invested less than US$100.000.
- If investment is less than 200.000 euro, dividends are subject to 15% withholding tax which is reduced to 10 per cent if the recipient company controls 25% or more of the paying company.
- No withholding tax for interest on deposits with banking institutions.
- Armenia, Azerbaijan, Kurghystan, Moldova, Tatzikistan, Uzbekistan and Ukraine apply the USSR/Cyprus treaty.
- 10% on interest received by a financial institution or when it relates to sale on credit of any industrial, commercial or scientific equipment or of merchandise
- This rate applies for any copyright of literary, dramatic, musical, artistic or scientific work. A 10% rate applies for industrial, commercial or scientific equipment. A 15% rate applies for patents, trade marks, designs or models, plans, secret formulae or processes.
- This rate applies to companies holding directly at least 25% of the share capital of the company paying the dividend. In all other cases the withholding tax is 10%.
- This rate does not apply if the payment is made to a Cyprus international business entity by a resident of Bulgaria owning directly or indirectly at least 25% of the share capital of the Cyprus entity.
- 7% if paid to bank or financial institution.
- Slovenia and Serbia/Montenegro apply the Yugoslavia/Cyprus treaty.
