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Cyprus double taxation treaty network
Cyprus has currently signed over 50 double taxation treaties even if it is a low-tax jurisdiction. Most of Cyprus’ tax treaties have multiple benefits for national offshore companies which will benefit from the same tax exemptions in partner countries. Most of Cyprus’ tax treaties were concluded according to the OECD (Organization for Economic Co-operation and Development) Model Convention through which the country of residence will provide credit for the taxes paid in the tax partner country. At the moment not all Cyprus’ double tax treaties are enforced, some of them being under negotiation.
For a complete list of all enforced double taxation agreements you may ask our law firm in Cyprus.
The Cyprus-Luxembourg tax treaty
The tax treaty between Cyprus and Luxembourg is not enforced yet, even if negotiations between the two countries have commenced in 2007. The negotiations have continued until 2011 when Luxembourg’s Finance Minister visited Cyprus in order to continue negotiations. The main topic on the agenda was the development of the financial sectors in Cyprus and Luxembourg and the incorporation of the EU legislation within the national laws and the conclusion of a bilateral double taxation agreement and fiscal cooperation between the two states.
Bilateral Investment Treaty Cyprus-Luxembourg
Currently, the only treaty enforced between Cyprus and Luxembourg is the Bilateral Investment Treaty (BIT) concluded in 1991 and enforced in 1999. According to this treaty, both countries will promote and accept investment according to the Luxembourg and Cypriot legislation for foreign investments. The treaty applies to both natural persons and Luxembourg and Cypriot companies. The agreement provisions the following:
- guarantees no discriminatory treatment to be applied to foreign investors,
- allows the repatriation of capital and profits,
- allows for investment to be made in real estate, bonds, shares in companies,
- the treaty also covers copyright.
Cyprus has singed similar bilateral investment treaties with other countries. For detailed information about the trading relations between Cyprus and Luxembourg we invite you to contact us. You may also rely on our lawyers in Cyprus for setting up a company.