Among the numerous double tax agreements signed by Cyprus, the country also concluded one with Greece in 1968. In this article, our lawyers in Cyprus briefly analyze the Cyprus-Greece double tax treaty and its provisions.
Table of Contents
Business profits provisions of the Cyprus – Greece double tax treaty
According to the Cyprus – Greece double tax treaty, business profits gained in one of these countries are taxed as follows:
- The income of a company based in one of the contracting parties is taxable only in that country, except when the company undertakes activities in the other state through a permanent legal entity. Our attorneys in Cyprus can offer more details on this subject;
- If a company which is established in one of the contracting countries undertakes activities in the other one through a permanent legal entity, the profits will be considered as separate and distinct.
- When determining the profits of a permanent legal entity, there are allowed certain deduction expenses, which can include executive and administrative expenses from the country where the company is based or elsewhere;
- Other provisions. Our lawyers in Cyprus can provide further information on what these other provisions consist of.
Dividend taxation according to the Cyprus – Greece double tax treaty
Under the above mentioned double tax treaty, dividends paid by a company based on one of the contracting jurisdictions to a resident of the other state can be taxed in this other state.
However, the tax applied to the dividends in the other country shall not be greater than 25% of the gross dividend amount.
New provisions of the Cyprus – Greece double tax treaty
In 2016, Cyprus and Greece concluded certain provisions of the double tax treaty which was previously signed between the two states.
These provisions state that the withholding tax in Cyprus has to also include the corporate tax payable by Cypriot companies on their income.
However, these new provisions make it clear that the withholding tax in Cyprus also includes the corporate tax that is due by local businesses on their income.
If you would like to learn more about the Cyprus – Greece agreement and its provisions, we invite you to get in touch with our law firm in Cyprus.