Main Provisions
Withholding tax rate on interest payments
- Interest paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State.
- However, such interest may also be
taxed in the Contracting State of which the company paying the
interest is a resident and according to the laws of that State, but
if the beneficial owner of the interest is a resident of the other
Contracting State, the withholding tax shall not exceed:
(a) 10% of the gross amount; or
(b) 0% for certain interest payments to the Government;
As per the domestic Cyprus tax legislation no Cyprus withholding applies on interest payments to non-Cyprus tax residents.
Withholding tax rate on dividend payments
- Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
- However, such dividends may also be
taxed in the Contracting State of which the company paying the
dividends is a resident and according to the laws of that State,
but if the beneficial owner of the dividends is a resident of the
other Contracting State, the withholding tax shall not exceed:
a) 5% of the gross amount of the dividends if the beneficial owner is a company which holds at least 10 per cent of the capital of the company paying the dividends; or
b) 15% of the gross amount of the dividends in all other cases;
As per the domestic Cyprus tax legislation no Cyprus withholding applies on dividend payments to nonCyprus tax residents.
Withholding tax rate on royalties' payments
- Royalties paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State.
- However, such royalty may also be
taxed in the Contracting State of which the company paying the
royalty is a resident and according to the laws of that State, but
if the beneficial owner of the royalty is a resident of the other
Contracting State, the withholding tax shall not exceed:
- 10% of the gross amount;
As per the domestic Cyprus tax legislation no Cyprus withholding applies on royalty payments to non-Cyprus tax residents (except if the royalty payments earned on rights used within Cyprus).
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