News

Cyprus has recently signed double tax treaty (DTTs) with Switzerland. The DTT was published in the Gazette on 30 July 2014.
The treaty based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.
The most significant provisions of the new treaty are highlighted below:
 Cyprus – Switzerland Double Tax Treaty
Permanent Establishment: The permanent establishment definition included in the treaty is in line with the definition provided in the OECD model tax convention. In particular, any building site or construction or installation project or any supervisory activities in connection with such site or project constitutes a permanent establishment only if it lasts more than twelve months.
Dividends:
0% withholding tax if the beneficial owner is:
• a company (other than a partnership) the capital of which is wholly or partly divided into shares and which holds directly at least 10% of the capital of the company paying the dividends for an uninterrupted period of at least one year or
• a pension fund or other similar institution recognized as such for tax purposes, or
• the Government, a political subdivision, local authority or central bank of one of the two contracting states.
15% withholding tax applies in all other cases.
Interest: Nil withholding tax.
Royalties: Nil withholding tax.
Capital gains: Gains derived by a resident of a Contracting State from the disposal of immovable property situated in the other Contracting State may be taxed in that other State.
Capital gains arising from the disposal of shares in a company deriving more than 50% of their value directly or indirectly from immovable property may be taxed in the Contracting State in which the property is situated, unless such shares are quoted on a stock exchange or the property is used in the company’s business or the alienation is a result of a corporate reorganisation. In such a case any gains are taxable only in the place of residence of the alienator.
Gains from the alienation of any other property, including shares other than those referred to above, are taxable only in the place of residence of the alienator.