Local
articles | 28 February 2013

Double Tax Treaty concluded between Cyprus and Spain

Cyprus has an extensive network of almost 50 Double Tax Treaties and has now successfully concluded a treaty with Spain.

The signing of the Double Tax Treaty between Cyprus and Spain in February is a positive development in the investment and trading relations between the two EU countries.

The treaty between Cyprus and Spain was signed in Nicosia after around eight years of negotiations. The Ambassador of Spain said the Double Tax Treaty will facilitate investments from Cyprus to Spain and vice versa, and that the signing of the treaty marks a strengthening of the economic relations between Cyprus and Spain. Cyprus was removed from the Spanish ‘Black List’ in 2009 and the new tax treaty will enter into force three months after it is ratified.

The treaty follows the OECD Model Convention and the most significant provisions of are the following:

Dividends: 0% withholding tax applies if the beneficial owner is a company (other than a partnership) holding at least 10% of the capital of the company paying the dividend, a rate of 5% applies in all other cases.

Interest: 0% withholding tax.

Royalties: 0% withholding taxapplies with respect to copyrights of literary, artistic or scientific work including films, any patent, trademark, secret formula or process or for information concerning industrial, commercial or scientific experience.

Capital Gains: Gains from the disposal of immovable property are taxed in the country in which the immovable property is situated. Gains from the disposal of shares or comparable interests (other than those listed on the Stock Exchange of either country) deriving more than 50% of their value from immovable property, are taxed in the country in which the immovable property is situated. Gains from the disposal of any other type of shares are taxed in the country of which the seller is resident.

 

The signing of the Double Tax Treaty between Cyprus and Spain in February is a positive development in the investment and trading relations between the two EU countries.

The treaty between Cyprus and Spain was signed in Nicosia after around eight years of negotiations. The Ambassador of Spain said the Double Tax Treaty will facilitate investments from Cyprus to Spain and vice versa, and that the signing of the treaty marks a strengthening of the economic relations between Cyprus and Spain. Cyprus was removed from the Spanish ‘Black List’ in 2009 and the new tax treaty will enter into force three months after it is ratified.

The treaty follows the OECD Model Convention and the most significant provisions of are the following:

Dividends: 0% withholding tax applies if the beneficial owner is a company (other than a partnership) holding at least 10% of the capital of the company paying the dividend, a rate of 5% applies in all other cases.

Interest: 0% withholding tax.

Royalties: 0% withholding taxapplies with respect to copyrights of literary, artistic or scientific work including films, any patent, trademark, secret formula or process or for information concerning industrial, commercial or scientific experience.

Capital Gains: Gains from the disposal of immovable property are taxed in the country in which the immovable property is situated. Gains from the disposal of shares or comparable interests (other than those listed on the Stock Exchange of either country) deriving more than 50% of their value from immovable property, are taxed in the country in which the immovable property is situated. Gains from the disposal of any other type of shares are taxed in the country of which the seller is resident.

 

-->
Cooperation Partners
  • Logo for Cyprus Investment Funds Association
  • Logo for CFA Cyprus
  • Logo for Cyprus International Businesses Association
  • Logo for Cyprus Chamber of Commerce and Industry
  • Logo for Cyprus In Your Heart
  • Logo for Association of Cyprus Banks
  • Logo for Cyprus Shipping Chamber
  • Logo for Invest Cyprus
  • Logo for Ministry of Energy, Commerce, Industry and Tourism