Double Tax Treaties withholding tax table

The following table contains an overview of the tax treaties currently in force to which Cyprus is a party. It also contains the withholding tax rates that are applicable to dividend, interest and royalty payments by Cyprus companies to non-residents under these treaties.

Under its local laws, Cyprus does not levy any withholding tax on dividends and interest paid/ payable to non-residents of Cyprus. No Cypriot tax is withheld on such payments, even where a treaty allows such tax. The same (absence of withholding tax) applies to royalty payments, provided that the right for which the payments are made is used outside Cyprus. Using the right to provide a (sub-) license to a foreign licensee typically qualifies as use outside of Cyprus.

The information below is based upon various sources, such as the internet database of the International Bureau of Fiscal Documentation, the website of the Cypriot Ministry of Finance, and unofficial communications with the Cypriot Ministry of Finance.

The last update of the tax treaty chart was made on July 2, 2008.

1. The different rates in this column are not explained because, under Cypriot law, no tax is withheld on dividends and interest paid/ payable to non-residents of Cyprus, even where a treaty allows such a tax.
2. The treaty concluded between Cyprus and the former USSR. Cyprus still upholds the tax treaty with the former USSR states. According to our information, in practice the former USSR states mentioned here also uphold the treaty, although reciprocal application so far has only been confirmed by the Ukraine. Not included here are Azerbaijan, Georgia and Kazakhstan, which according to our information do not apply the treaty between the former USSR and Cyprus. See also note 6 regarding Armenia and note 19 regarding Uzbekistan.
3. The lower rate applies to copyrights on literary, dramatic, musical and artistic works, excluding films.
4. The lower rate applies to copyrights on literary, artistic and scientific works, including film and television royalties.
5. The rate is 5% on films, etc.
6. The position regarding the applicability of the U.S.S.R. treaty remains unclear: Cyprus continues to apply the U.S.S.R. treaty of 29 October 1982 in relations with Armenia. In practice Armenia generally does not apply the former conventions.
7. The 5% rate applies to artistic and scientific copyrights, including software, films, etc.; the 10% rate applies to equipment leasing and know-how; the 15% rate applies to patents, trademarks, designs
8. A new tax treaty with Moldova was ratified by Moldova on April 25, 2008 and is pending ratification by Cyprus; the date of entering into force is currently not yet known.
9. The rate is 0% in case the right is granted for use outside Cyprus.
10. The rate is 5% on any rental in respect of the show in Cyprus of cinematograph films (whether such rental is fixed or constitutes a percentage of the gross receipts).
11. The general rate of 10% applies (except where the 0% or 5% rate applies) to the gross amount of any royalty, premium, compensation or other income derived from sources within Cyprus by any person not being resident in Cyprus, who is not engaged in any business in Cyprus, in consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark, know-how or any other like property or in consideration of technical assistance.
12. On 21 February 2007, the Ukrainian Government authorized the Ministry of Finance to conclude a new income tax treaty between Ukraine and Cyprus. Once signed and in force, the new treaty will replace the Cyprus-former USSR tax treaty of 29 October 1982 in bilateral relation between Ukraine and Cyprus. Recently, the Ukrainian parliament voted not to approve the new treaty. We understand that after this decision, a new vote, regarding the approval of all new Ukrainian tax treaties, was planned to take place. According to the latest information we have, the new treaty is pending signature.
13. In an Exchange of Letters dated 19 January 1999, Cyprus and the Czech Republic agreed to continue to apply the Czechoslovak treaty of 15 April 1980 in relations between the two states.
14. Cyprus continues to apply the Yugoslavia treaty of 29 June 1985 in relations with Bosnia and Herzegovina. In practice Bosnia and Herzegovina generally continues to apply the former conventions.
15. The position regarding the applicability of the former Yugoslavia treaty remains unclear: Currently there is no statement from Cyprus regarding the applicability of the former Yugoslavia treaty of 29 June 1985 in relations between Cyprus and FYROM. In practice FYROM generally continues to apply the former conventions.
16. In an Exchange of Letters dated 13 April 2000 and 5 May 2000, Cyprus and Slovenia agreed to continue to apply the Yugoslavia treaty of 29 June 1985 in relations between the two states. 
17. Serbia and Montenegro ceased to exist on 5 June 2006. Serbia is the legal successor of the state union of Serbia and Montenegro. This treaty was concluded by the former Yugoslavia and continued to apply in relations between Serbia and Montenegro and Cyprus. This treaty remains applicable in relations between Serbia and Cyprus. Montenegro has declared that it will honor all tax treaties that applied with respect to Serbia and Montenegro. However, application of the treaty with Montenegro has to be confirmed by Cyprus.
18. In an Exchange of Letters dated 10 December 1999 and 10 January 2000, Cyprus and the Slovak Republic agreed to continue to apply the Czechoslovak treaty of 15 April 1980 in relations between the two states.
19. The position regarding applicability of the U.S.S.R. treaty remains unclear: Cyprus continues to apply the U.S.S.R. treaty of 29 October 1982 in relations with Uzbekistan. In practice, Uzbekistan does not generally apply the former conventions.