Cyprus and International Tax Planning

CYPRUS TAX SYSTEM

Income Tax For Individuals

An individual is tax resident in Cyprus if :

  • Physically present in Cyprus for an aggregate period exceeding 183 days in any one calendar year

                                             OR

  • Resides in Cyprus for at least 60 days within the tax year.
  • Does not reside more than 183 days in aggregate in any other state within the tax year.
  • Is not a tax resident of any other state within the tax year.
  • Carries on a business in Cyprus or is employed in Cyprus or holds an office in a Cyprus tax resident company at any time during the tax year. It is noted that in case the business, employment or holding of an office under this condition is terminated during the tax year, the person shall not be considered a Cyprus tax resident for that particular tax year.
  • Maintains a permanent residence in Cyprus (either rented or owned).

Tax residents are liable to tax in Cyprus on their worldwide income whereas non-resident individuals are only liable to tax on income arising in Cyprus. Foreign tax paid can be credited against income tax payable in Cyprus.

Income includes business income, income from any office or employment, dividends and interest, rents and royalties, pensions and annuities, and benefits in kind such as housing, travelling, school fees and food allowance.

The tax rates applicable for individuals are:

€

0-19.500                               0%

19.501-28000                      20%

28.001-36.300                    25%

36.301 – 60,000                 30%

Over 60,000                        35%

Foreign pension income is taxed at the flat rate of 5% on amounts over €3,420. The taxpayer can however on an annual basis elect to be taxed at the normal tax rates and bands set out above.

Cyprus widow (er)’s pension is taxed at the flat rate of 20% on amounts over €19,500. The taxpayer can however on an annual basis elect to be taxed at the normal tax rates and bands set out above.

 

Exemptions

The following income is exempt from income tax:

  • Dividends received are exempt from income tax and instead are taxable under special contribution for defense.
  • Interest, except for interest arising from the ordinary business activities. Passive interest (interest not arising from the ordinary business activities) is taxable under special contribution for defense
  • Profits from the disposal of shares and other securities
  • Profits from a permanent establishment situated outside Cyprus of a Cypriot resident
  • 50% of the remuneration from any employment exercised in Cyprus by an individual who was not resident in Cyprus before the commencement of the employment, provided that the annual remuneration exceeds €100,000. For employment commencing as from 1st January 2015, the exemption does not apply, in case the said individual was a Cyprus tax resident for 3 or more tax years out of the last 5 tax years ,immediately prior to the tax year of commencement of the employment nor in the preceding tax year
  • 20% of the remuneration exercised in Cyprus, but maximum limited to €8,550 per year, by an individual who was not resident of Cyprus before the commencement of the employment. For employments commencing during or after 2012 the exemption applies for a period of 5 years starting from the tax year of commencement of the employment with the last eligible tax year being 2020. This exemption may not be claimed in addition to the 50% exemption mentioned above
  • All Remuneration from salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer or to a foreign permanent establishment of a Cyprus resident employer
  • Lump sum received by way of retiring gratuity, commutation of pension or compensation for death or injuries.
  • Capital sums accruing to individuals from any payments of approved funds (e.g. provident funds)

 

Tax Deductions

  • Contributions to trade unions or professional bodies
  • Loss of current year and previous years can be carried forward and set off against future profits
  • 20% of Rental Income
  • Donations to approved charities (supported by receipts)
  • Expenditure for the maintenance of a building under Preservation Order
  • Contributions to Social Insurance, Medical Funds, Life insurance premiums and Provident Funds
  • Special contribution
  • Up to 50% of taxable income for investments in approved innovative small and medium sized enterprises

 

Corporation Tax for International Business Companies

A company which is managed and controlled in Cyprus is considered tax resident in Cyprus and is liable to tax on income arising both from sources within and outside Cyprus. A company which is not tax resident in Cyprus is liable to tax on income arising from sources within Cyprus only.

Cypriot tax residency is achieved, in practice, by having a majority of Cypriot resident directors and ensuring that the major decision – making is taken in Cyprus. This is usually achieved by having meetings of the Board of Directors take place in Cyprus and signing contracts, agreements and other relevant company documents relating to the management, control and administrative functions in Cyprus. Furthermore the accounting records of the company are prepared and kept in Cyprus and the bank accounts are operated from Cyprus, even if the accounts are maintained with banks established outside Cyprus.

A uniform tax rate of 12.5% on net profits is applied to all companies either operating locally or internationally. The rate of 12.5% applies to net profits after deducting all expenses incurred wholly and exclusively for the production of income. Foreign taxes paid are deducted from the tax liability payable in Cyprus.

Exemptions

The following income is tax free:

  • Dividends received
  • Profits from the disposal of shares and other securities
  • Profits from a permanent establishment situated outside Cyprus
  • Interest income not arising from the ordinary activities of the company
  • Gains relating to foreign exchange differences with the exception of foreign exchange gains arising from trading and in foreign exchange from the ordinary activities of the company

There is no withholding tax on payments of dividends and interest to non-tax residents (individuals or companies). Thus dividends paid out of profits of the International Business Company to the non-resident ultimate beneficiaries /shareholders are paid gross without any withholding taxes.

Relief for taxes paid abroad is granted in the form of a tax credit against tax payable in Cyprus. The relief is given unilaterally irrespective of the existence of a double tax treaty.

 

Tax Deductions

  • All expenses incurred wholly and exclusively for the business and the production of income.
  • Interest expense incurred for the purchase of a subsidiary
  • Notional interest on new equity (in the form of paid up share capital) introduced in a company.
  • 80% of net profits derived from intellectual property
  • Expenditure for the maintenance of a building under Preservation Order
  • Entertainment expenses for business purposes
  • Tax losses can be carried forward and set off against the profits for the next five years
  • Annual wear and tear allowances (capital allowances) on qualifying fixed assets, based on a percentage of the cost of acquisition are deductible from the net profits of the company
  • Donations to approved charities
  • Employer’s contributions to social insurance funds
  • Group losses available

 

Tax for Special Type of Companies

  1. Profits from Shipping Activities

The following are exempt from taxation in accordance with the provisions of the Merchant Shipping Legislation and are subject to tonnage tax:

  • The income of a ship-owner of a Cyprus ship from the operation of such ship in any shipping activity between Cyprus and ports abroad or between ports abroad.
  • Interest income relating to the working capital of the company
  • Profit from the sale of qualifying ships
  • Profit from the sale of a ship owning company
  • The income of a company or individual from the provision of ship management services.
  • Dividends paid to the shareholders of a ship owning company
  • Dividends paid to the shareholders of a ship management company.
  • Profits and dividends of Charterers of a Cyprus ship
  • Salaries and other benefits paid to the master, the officers and the crew of a Cyprus ship

 

  1. Insurance companies

Profits of insurance companies are liable to corporation tax similar to all other companies except in the case where the corporation tax payable of life insurance business is less than 1.5% of the gross premium. In this case the difference is paid as additional corporation tax.

 

  1. Cyprus Intellectual Property Companies (IP)

The major tax benefits of Cypriot IP companies are:

  • 80% of worldwide royalty income generated from IP owned by Cypriot resident companies (net of any direct expenses) is exempted from any form of taxation
  • 80% of the profit generated from the disposal of an IP owned by a Cypriot resident company (net of any direct expenses) is exempted from any form of taxation
  • Any expenditure of a capital nature for the acquisition or development of IP is claimed as a tax deduction over a five year period on a straight line method

 

Special Contribution For Defence

Special Contribution for Defence is imposed on dividend income, “passive” interest income and rental income earned by companies tax resident in Cyprus and by individuals who are both Cyprus tax resident and Cyprus domiciled. It is charged at the following rates:

                                                           Individuals                          Companies

Dividend Income                                                                                                                   17%                                           Nil

“Passive” interest income                                                                                                    30%                                           30%

Rental Income (reduced by 25%)                                                                                        3%                                              3%

 

Notes:

  1. Individuals are subject to Special contribution for defence if they are both Cyprus tax resident and Cyprus domiciled. For the purpose of Special contribution for defence an individual is domiciled in Cyprus if he has been a tax resident of Cyprus for at least 17 out of the last 20 years prior to the tax year of assessment.
  2. Dividends received by a Cyprus tax resident company are exempt.
  3. Passive interest income earned by individuals from Cyprus government bonds is subject to a reduced rate of 3%.
  4. A Cyprus tax resident company is deemed to distribute as a dividend 70% of its accounting profit (after deducting corporation tax, special contribution for defence and capital gains tax), two years from the end of the tax year in which the profits were generated. Such a deemed dividend distribution is reduced by the payments of actual dividends paid during the relevant period. On the remaining net amount of the deemed distribution 17% Special Contribution for Defence is imposed on the shareholders who are both Cyprus Tax residents and Cyprus domiciled.

 

Capital Gains Tax

 

Capital Gains Tax at the rate of 20% is imposed on gains from the disposal of immovable property situated in Cyprus including shares of companies which directly own immovable property situated in Cyprus.  Further, as from 17 December 2015 shares of companies which indirectly own immovable property located in Cyprus and at least 50% of the market value of the said shares derive from such immovable property are subject to capital gains tax on the part of the gain relating to the immovable property situated in Cyprus.  Disposals for Capital Gains Tax purposes specifically include sale, exchange, leasing, gifting, abandoning of use of right, granting of right to purchase, and any sums received upon cancellation of disposals of property.

Shares listed on any recognized stock exchange are excluded from the above provisions.

The following disposals of immovable property are exempt from capital gains tax:

  • Land as well as Land and Buildings, acquired during the period 16 July 2015 up to 31 December 2016 will be exempt from Capital Gains Tax on their disposal
  • Transfers arising on death
  • Gifts between spouses, parents and children and relatives up to third degree
  • Gifts to a company whose shareholders are members of the donor’s family and continue to be members of the donor’s family for a period of not less than five years from the date of the gift
  • Gifts by a family company to its shareholders, if the company has also acquired the property in question via donation and provided the property remains in the possession of the shareholder for at least three years.
  • Gifts to charitable organizations of the Republic and to the Government
  • Exchange provided the gain is used for the acquisition of new property
  • Transfer of ownership between spouses that their marriage has been dissolved by a court order
  • Transfers as a result of reorganizations
  • Expropriations

 

Estate Duty

Estate duty has been abolished since 1 January 2000.

The executor / administrator of the estate of the deceased, is required by the Deceased Persons Estate Law, to submit to the Tax Authorities a statement of assets and liabilities of the deceased within six months from the date of death.

 

Value Added Tax (VAT)

 

VAT is imposed on the supply of goods and provision of services in Cyprus as well as on the acquisition of goods from the European Union (EU) and the importation of goods into Cyprus.

Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods and services which they receive (input tax). If output tax in a VAT period exceeds input tax, a payment of the difference has to be paid to the VAT authorities. If input tax exceeds output tax, the excess input tax is carried forward as a credit and set off against future output tax.

In certain cases an actual VAT refund can be obtained, such as:

  • A period of eight months has elapsed from the date the VAT became refundable.
  • The input VAT relates to zero rated output transactions
  • The input VAT relates to capital assets of the company
  • The input VAT relates to transactions which are outside the scope of VAT but would have been subject to VAT had they been carried out in Cyprus.
  • Input VAT which cannot be set off against output VAT until the last VAT period of the year which follows the year in which the VAT period in which the credit was created falls.

For intra-community acquisitions of goods (with the exception of goods subject to excise duty), the trader does not pay VAT but instead accounts for VAT using the reverse charge method.

 

Standard Rate 19%
Applies to any provision of goods and services in Cyprus not subject to the zero rates, the reduced rates or is exempt.

Reduced Rate 9%
Applies to the following provision of goods and services in Cyprus:

  • Hotel accommodation
  • Restaurants and catering services
  • Transportation of passengers and their accompanying luggage using urban, intercity and rural taxis and buses.
  • Movement of passengers in inland waters and their accompanying luggage

Reduced Rate 5%
Applies to the following provision of goods and services in Cyprus:

  • Acquisition and / or construction of residences for use as the primary and permanent place of residence. Based on the relevant legislation, the reduced rate of 5% applies on the first 200 square meters, whereas for the remaining square meters as determined based on the building coefficient, the standard Vat rate of 19% applies.
  • Renovation and repair of old private residences for which a period of at least three years has elapsed from the date of their first use.
  • Supply of fertilizers, animal feeding products and seeds
  • Supply of live animals for human consumption
  • Books, magazines and newspapers
  • Non-bottled water
  • Liquid gas
  • Supply of Foodstuffs
  • Supply of pharmaceutical products and vaccines that are used for health care purposes
  • Various goods for the use of handicapped persons
  • Ice cream and similar products
  • Funeral service and supply of coffins
  • Road sweeping, garbage collection and recycling
  • Services of authors, composers and artists

Zero Rates 0%

Applies to the provision of the following goods and services:

  • Exports to non-EU countries
  • Supply, modification, repair, maintenance, chartering and hiring of sea going vessels which are used for navigation on the open sea and which are carrying passengers for reward or used for the purpose of commercial, industrial and other business activities
  • Supply, modification, repair, maintenance, chartering and hiring of aircrafts used by airlines  for reward mainly or international routes
  • Supply of services to meet the direct needs of sea going vessels and aircrafts
  • Transportation of passengers from Cyprus to a place outside Cyprus or vice versa using a sea going vessel or aircraft
  • Supplies of Gold to the Central Bank of Cyprus
  • Commissions received from abroad for import and export of goods.

 

Exempt

Certain goods and services are exempt from VAT. They include:

  • Letting of immovable property (the letting of immovable property with the right to purchase is not exempt)
  • Most banking and financial services and insurance services
  • Most hospital, medical and dental care services
  • Certain cultural education and sports activities
  • Supplies of real estate (except supply of buildings before their first use) including supplies of land and of second-hand buildings
  • Postal services provided by the national postal authority
  • Lottery tickets and betting coupons for football and horse racing
  • Management services provided to mutual funds

 

The difference between zero rate and exempt supplies is that businesses that make exempt supplies are not entitled to recover the VAT input charged on their purchases, expenses or imports.

 

Obligation to Register For VAT

Every individual or company is obliged to register if:

  • Taxable supplies (turnover) are expected to exceed €15.600 per annum
  • Provides services to a VAT registered company within the EU with nil registration threshold
  • Offers distant sales with registration threshold of €35.000
  • Is involved in the acquisition of goods from other EU members states and relates to persons who offer exempt supplies of goods and services with registration threshold of €10.250
  • Offers zero rated supplies of goods and services

 

International Business Companies who trade outside Cyprus in goods and services which would have been taxable for VAT purposes if they were provided within Cyprus, have a right to Register in Cyprus and obtain a VAT registration number.

VAT Returns

  • Submission of quarterly VAT returns to the VAT Commissioner within 40 days of the tax period
  • Intrastate return on a monthly basis of intra-community arrivals and departure of goods and services within 10 days of the month following the month of the intrastate return.
  • Vies return on a monthly basis (recapitulative statement for supplies of goods and services) within 15 days of the month following the month of the Vies return.

Global Consultants offer and a full and comprehensive VAT service, to ensure absolute compliance with all rules, regulations and directives, and to maximize cash flow possibilities.

 

Immovable Property Tax

Immovable Property Tax (IPT) is abolished as from 1 January 2017. Until the tax year 2016, the owner of immovable property situated in Cyprus was liable to pay an annual IPT which was calculated on the market value as at 1 January 1980, at varying rates which applied per owner and not per property.

 

Social Insurance

The rate of Social Insurance contributions is applied to a maximum gross level of emoluments. The maximum level of salaried employees for 2017 is €54,396 (monthly €4,533, weekly €1,046)

The rate of the employees’ contributions is fixed at 7.8% on their gross emoluments.

The employer’s contributions, based on the employees’ gross emoluments, are as follows:

 

Social Insurance contributions                     7.8%

Social cohesion fund                                       2.0% (no maximum level)

Redundancy fund                                            1.2%

Industrial training fund                                 0.5%

Holiday fund                                                    8.0 %(if no exemption is granted)

 

The contributions of self-employed persons are 14.6% of their income. The amount of the contributions is subject to a lower and a maximum level, depending on the profession or trade of the self-employed person. These limits are set on an annual basis.

 

Tax treaties withholding tax (WHT) tables

 

WHT on dividends, interest and royalties

Cyprus does not levy a WHT on dividends, interest and royalties paid to non-residents of Cyprus except in the case of royalties earned on rights used within Cyprus, which are subject to a WHT of 10% (5% in the case of cinematographic films). Such Cyprus WHT on royalties for rights used within Cyprus may be reduced or eliminated by double tax treaties entered into by Cyprus or by the EU Interest and Royalty Directive as enacted in the Cyprus tax legislation.

 

WHT on other types of income

Cyprus levies a 10% WHT on technical services performed by non-residents in Cyprus. However no such WHT is levied if such services are performed via a permanent establishment in Cyprus of the non-resident or if performed between ‘associated’ companies as these are defined by the EU Interest and Royalty Directive as enacted in the Cyprus tax legislation.

Cyprus also levies a 10% WHT on the gross income/receipts derived by a non-resident individual from the exercise in Cyprus of any profession or vocation and the remuneration of non-resident public entertainers (such as theatrical, musical including football clubs, other athletic missions etc).

Further, a 5% WHT is levied on gross income derived from within Cyprus by non-residents with no local permanent establishment for services in regards to the exploration, extraction or exploitation of the continental shelf as well as the establishment and use of pipelines and other installations on the ground, on the seabed and on the surface of the sea.

 

 

 

WHT on dividend, interest and royalties tables

 

Table A below illustrates the applicable Cyprus WHT rates on outbound dividend, interest and royalty payments.

Table B, further below, illustrates the WHT rates provided for in the double tax treaties entered into by Cyprus. This table illustrates the maximum tax rates on Cyprus inbound payments which the treaty partner country may charge on such type incomes qualifying under the respective treaty. The actual WHT rate charged may be lower/ eliminated based on each paying country’s domestic law provisions.

Table A – WHT on outbound payments from Cyprus

Paid from Cyprus

Paid to Dividends (1) % Interest (1) % Royalties Rights not used within Cyprus % Royalties Rights used within Cyprus %
Non-treaty countries Nil Nil Nil 5/10(2)
Armenia Nil Nil Nil 5
Austria Nil Nil Nil Nil
Bahrain (13) Nil Nil Nil Nil
Belarus Nil Nil Nil 5
Belgium Nil Nil Nil Nil
Bosnia (7) Nil Nil Nil 5/10 (5)
Bulgaria Nil Nil Nil 5/10 (5)
Canada Nil Nil Nil 0/5/10 (4), (5)
China, P.R. Nil Nil Nil 5/10 (5)
Czech Republic Nil Nil Nil 0/10 (11)
Denmark Nil Nil Nil Nil
Egypt Nil Nil Nil 5/10 (5)
Estonia Nil Nil Nil Nil
Finland Nil Nil Nil Nil
France Nil Nil Nil 0/5 (3)
Georgia (13) Nil Nil Nil Nil
Germany Nil Nil Nil Nil
Greece Nil Nil Nil 0/5 (5)
Guernsey (12) Nil Nil Nil Nil
Hungary Nil Nil Nil Nil
Iceland Nil Nil Nil 5
India Nil Nil Nil 5/10 (5)
Ireland, Rep. of Nil Nil Nil 0/5 (5)
Italy Nil Nil Nil Nil
Kuwait Nil Nil Nil 5
Latvia (13) Nil Nil Nil 0/5 (14)
Lebanon Nil Nil Nil Nil
Lithuania Nil Nil Nil 5
Malta Nil Nil Nil 5/10 (5)
Mauritius Nil Nil Nil Nil
Moldova Nil Nil Nil 5
Montenegro (7) Nil Nil Nil 5/10 (5)
Norway Nil Nil Nil Nil
Poland Nil Nil Nil 5
Portugal Nil Nil Nil 5/10 (5)
Qatar Nil Nil Nil 5
Romania Nil Nil Nil 0/5 (10)
Russia Nil Nil Nil Nil
San Marino Nil Nil Nil Nil
Serbia (7) Nil Nil Nil 5/10 (5)
Seychelles Nil Nil Nil 5
Singapore Nil Nil Nil 5/10 (5)
Slovakia Republic (9) Nil Nil Nil 0/5 (10)
Slovenia Nil Nil Nil 5
South Africa Nil Nil Nil Nil
Spain (15) Nil Nil Nil Nil
Sweden Nil Nil Nil Nil
Switzerland (12) Nil Nil Nil Nil
Syria Nil Nil Nil 5/10 (5)
Thailand Nil Nil Nil 5/10 (6)
Ukraine Nil Nil Nil 5/10 (8)
United Arab Emirates Nil Nil Nil Nil
United Kingdom Nil Nil Nil 0/5 (3)
 United States Nil Nil Nil Nil

 

 

Notes – Table A – outbound Payments from Cyprus

 

  1. Under Cyprus legislation, there is no WHT on dividends and interest paid to non residents of Cyprus. Further, there is also no WHT on royalties paid to non-residents of Cyprus for rights not used within Cyprus.
  2. Royalties earned on rights used within Cyprus are subject to WHT of 10% (except royalties relating to cinematographic films, where the WHT rate is 5%).
  3. A WHT rate of 5% is applicable on royalties for cinematographic films including films and video tape for television.
  4. 0% on literary, dramatic, musical, or artistic work (excluding motion picture films and works on film or videotape for use in connection with television).
  5. The WHT rate of 5% is applicable on cinematographic film royalties.
  6. 5% WHT applies for any copyright of literary, dramatic, musical, artistic, or scientific work.
  7. Serbia, Montenegro and Bosnia apply the Yugoslavia/ Cyprus treaty.
  8. A 5% WHT will be levied on payment of royalties in respect of any copyright of scientific work, any patent, trademark, secret formula, process, or information concerning industrial, commercial, or scientific experience and cinematographic films.
  9. The Cyprus-Czechoslovakia treaty applies with the Slovak Republic.
  10. 5% 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.
  11. 10% for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
  12. The treaty is effective 1 January 2016.
  13. The treaty is effective 1 January 2017.
  14. Nil applies if the payer is a company that is a resident in Cyprus and the beneficial owner of the income is a company (other than partnership) that is a resident in Latvia. 5% rate applies for all other cases.

 

 

Table B- Maximum WHT on inbound payments to Cyprus

Received in Cyprus

Paid from Dividends

%

Interest

%

 Royalties

%
Armenia 0/5 (1) 5 5
Austria 10 Nil Nil
Bahrain (43) Nil Nil Nil
Belarus 5/10/15 (2) 5 5
Belgium 10/15 (3) 0/10 (4), (5) Nil
Bosnia (6) 10 10 10
Bulgaria 5/10 (7) 0/7 (4), (8) 10 (8)
Canada 15 0/15 (9) 0/10 (10)
China, P.R. 10 10 10
Czech Republic 0/5 (11) Nil 0/10 (12)
Denmark 0/15 (4), (13) Nil Nil
Egypt 15 15 10
Estonia Nil Nil Nil
Finland 5/15 (14) Nil Nil
France 10/15 (15) 0/10 (16) 0/5 (17)
Georgia (43) Nil Nil Nil
Germany 5/15 (18) Nil Nil
Greece 25 10 0/5 (19)
Guernsey (40) Nil Nil Nil
Hungary 5/15 (3) 0/10 (4) Nil
Iceland 5/10 (39) Nil 5
India 10 (20) 0/10 (46) 10 (21)
Ireland, Rep. Of Nil Nil 0/5 (19)
Italy 15 10 Nil
Kuwait 0 0 5
Latvia (43) 0/10 (44) 0/10 (44) 0/5 (45)
Lebanon 5 5 Nil
Lithuania 0/5 (22) Nil 5
Malta Nil 10 10
Mauritius Nil Nil Nil
Moldova 5/10 (24) 5 5
Montenegro (6) 10 10 10
Norway 0/15 (36) Nil Nil
Poland 0/5 (23) 0/5 (4) 5
Portugal 10 10 10
Qatar Nil Nil 5
Romania 10 0/10 (4) 0/5 (25)
Russia 5/10 (26) Nil Nil
San Marino Nil Nil Nil
Serbia (6) 10 10 10
Seychelles Nil Nil 5
Singapore Nil 0/7/10 (4), (27) 10
Slovak Republic (37) 10 0/10 (4) 0/5 (25)
Slovenia 5 5 5
South Africa 5/10 (42) Nil Nil
Spain 0/5 (28) Nil Nil
Sweden 5/15 (3) 0/10 (4) Nil
Switzerland (40) 0/15 (41) Nil Nil
Syria 0/15 (29) 0/10 (9) 10/15 (38)
Thailand 10 10/15 (30) 5/10/15 (31)
Ukraine 5/15 (32) 2 5/10 (33)
United Arab Emirates Nil Nil Nil
United Kingdom 0/15 (34) 10 0/5 (17)
United States 5/15 (35) 0/10 (16) Nil

 

 

Notes – Table B – inbound payments to Cyprus

  1. The rate of 5% if a dividend is paid by a company in which the beneficial owner has invested less than EUR 150.000.
  2. A rate of 5% if the investment is not less than EUR 200.000 in the share capital of the company paying the dividend. If such investment is less than EUR 200000, dividends are subject to 15% WHT which is reduced to 10% if the recipient company controls 25% or more of the paying company.
  3. A rate of 15% applies if received by a company holding less than 25% of the share capital of the paying company and in all cases if received by an individual.
  4. No WHT if paid to the government/Central Bank/ Public Authority of the other state.
  5. No WHT for interest on deposits with banking institutions.
  6. Serbia, Montenegro and Bosnia apply the Yugoslavia/Cyprus treaty.
  7. The 5% rate applies to companies holding directly at least 25% of the share capital of the company paying the dividend. In all other cases the WHT is 10%.
  8. The treaty rates do not apply if the payment is made to a Cyprus entity by a resident of Bulgaria owning directly or indirectly at least 25% of the share capital of the Cyprus entity and the Cyprus entity pays tax in Cyprus at a tax rate lower than the usual tax rate.
  9. Nil if paid to a government/Central Bank/ Public Authority or for export guarantee.
  10. Nil on literary, dramatic, musical, or artistic work (but not including royalties in respect of motion picture films and works on film or videotape for use in connection with television).
  11. Nil applies if received by a company (excluding partnership) which holds directly at least 10% of the share capital of the paying company for an uninterrupted period of no less than one year. 5% applies in all other cases.
  12. 10% for patent, trademark, design or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
  13. A rate of 15% if received by a company controlling less than 10% of the share capital of the paying company or the duration of any holding is less than one uninterrupted year. A rate of 15% also applies if received by an individual.
  14. A rate of 15% applies if received by a company controlling less than 10% of the voting power in the paying company and in all cases if received by an individual.
  15. A rate of 15% if received by a company (partnership is excluded) holding less than 10% of the capital of the paying company and in all cases if received by an individual.
  16. Nil if paid to a government, bank, or financial institution.
  17. A rate of 5% on royalties for cinematographic films including films and video tapes for television.
  18. A rate of 15% if received by a company holding less than 10% of the capital of the paying company and in all cases if received by an individual.
  19. A rate of 5% on cinematographic film royalties (other than films shown on television).
  20. Prior to 1 April 2017, the applicable rate is 15% if received by a company holding less than 10% of the shares of the paying company and in all cases if received by an individual.
  21. A rate of 10% is also applicable for payments of a technical, managerial, or consulting nature. Prior to 1 April 2017, a rate of 15%applies on royalties.
  22. A rate of 5% if received by a company (other than partnership) holding less than 10% of the capital of the company paying the dividend and in all cases if received by an individual.
  23. Nil rate applies if the recipient company (partnership is excluded) holds directly 10% of the share capital of the paying company for an uninterrupted period of at least 2 years. 5% in allother cases.
  24. A rate of 5% applies if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends. A rate of 10% in all other cases.
  25. 5% 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.
  26. A rate of 10% on dividend if paid by a company in which the beneficial owner has invested less than EUR 100.000 in the share capital of the company paying the dividend.
  27. A rate of 7% if paid to a bank or financial institution.
  28. A rate of 5% if received by a company holding less than 10% of the capital of the paying company and in all cases if received by an individual or a company not limited at least partly by shares.
  29. A rate of 15% if received by a company holding less than 25% of the share capital of the paying company and in all cases if received by an individual or a company not limited at least partly by shares.
  30. A rate of 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.
  31. A rate of 5% 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, trademarks, designs or models, plans, secret formulas, or processes.
  32. A rate of 15% if a dividend is paid by a company in which the beneficial owner holds less than 20% of the share capital of the paying company and the beneficial owner has invested less than Euroο000.
  33. A 5% WHT will be levied on payment of royalties in respect of any copyright of scientific work, any patent, trade mark, secret formula, process or information concerning industrial, commercial or scientific experience. 10% WHT will be levied in all other cases.
  34. A rate of 15% applies to individual shareholders regardless of their percentage of shareholding. Companies controlling less than 10% of the voting shares are also entitled to a rate of 15%. Companies controlling at least 10% of the voting shares are entitled to nil WHT.
  35. A rate of 15% if received by a company controlling less than 10% of the voting power of the paying company and in all cases if received by an individual. If a company controls at least 10% of the voting power of the paying company in order to benefit from the WHT rate of 5% other conditions relating to the income of the paying company need to be satisfied, otherwise a WHT rate of 15%.
  36. Nil rates applies if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends or if the beneficial owner of the shares is the Government of Cyprus or Norway. A rate of 15% in all other cases.
  37. The Cyprus – Czechoslovakia treaty applies with the Slovak Republic.
  38. 10% rate applies on payment of royalties of any copyright of literary, artistic or scientific work including cinematograph films, and films or tapes for television or radio broadcasting. A rate of 15% applies on payments of royalties of any patent, trade mark, design or model, plan, secret formula or process, or any industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience.
  39. A rate of 5% if received by company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividend. 10% in all other cases.
  40. The treaty is effective from 1 January 2016.
  41. Nil rate applies if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends during an uninterrupted period of at least one year (the holding period condition may be satisfied post the date of the dividend payment). Nil rate also applies if the beneficial owner is a pension fund or other similar institution or relates to the Government of Cyprus or Switzerland. 15% in all other cases.
  42. A protocol to the treaty entered into force on 18 September 2015 but may apply retrospectively. 5% rate applies if the beneficial owner is a company which holds at least 10% of the capital of the company paying the dividend. 10% in all other cases.
  43. The treaty is effective from 1 January 2017.
  44. Nil applies if the payer is a company that is a resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is a resident in Cyprus. 10% rate applies for all other cases (except for certain governmental interest).
  45. Nil applies if the payer is a company that is a resident in Latvia and the beneficial owner of the income is a company (other than partnership) that is a resident in Cyprus. 5% rate applies for all other cases.
  46. Nil if paid to a government or any other institution agreed upon between the two States. Prior to 1 April 2017, nil rate also applies if paid to a bank or financial institution