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Cyprus: Double Tax Treaties

Tax-Sparing Provisions

A tax-sparing provision has the effect that if tax is 'spared', i.e. exempted in Cyprus, then it is credited against an investor's tax liability in their home country (the treaty counterpart) as if it had actually been paid in Cyprus. At the time of writing, there are tax-sparing provisions in the treaties with the following countries:

  • Canada
  • Czech Republic
  • Denmark
  • Germany
  • Greece
  • India
  • Ireland
  • Italy
  • Malta
  • Romania
  • Slovakia
  • Sweden
  • Syria
  • United Kingdom

 

Taxes that are all or partly spared are as follows:

  • Tax on interest paid on loans for economic development in Cyprus (Canada, Denmark, Germany, France, UK)
  • Tax relieved because of deductions in respect of investment in Cyprus (Canada, UK)
  • Tax on interest or profits which is unpaid because of tax incentives, reliefs or exemptions in Cyprus (Czech Republic, Greece, Ireland, Romania, Slovakia)
  • Tax not withheld on dividends (15%) if the exemption is given for the purposes of economic development in Cyprus (Denmark, Germany, France)

 

 

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