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Cyprus Update
Tax treaty update
Cyprus has concluded three new agreements – with
Denmark, Slovenie and United Arab Emirates.
1.Cyprus - Denmark
The new tax treaty replacing the old 1981 treaty will enter
into force from the 1st January 2012. In the new treaty,
there is no withholding tax on income from interest and
royalties, as well as on dividend, assuming a holding of
10% for a minimum shareholder period of 12 months.
2.Cyprus - Slovenia
The new tax treaty replacing the old 1985 Yugoslavia treaty
will enter into force from the 1st January 2012. In the new
treaty, there is a 5% withholding tax on dividend, interest
and royalties income.
The special contribution for the
defence in republic law
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The rate of defence tax on interest has increased from
10% to 15%.
For more information please contact:
Nicholas Stavrinides
Director
PKF Savvides & Co Ltd
T: +357 25 868 000
E: nicholas.s@pkf.com.cy
3.Cyprus - United Arab Emirates
A double tax treaty has been signed and will enter into
force from the 1st January 2012. In the treaty, there is no
withholding tax on dividend, interest and royalties income.
Changes in Cyprus tax legislation
The income tax law
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A new income tax rate of 35% is introduced for individuals
with taxable income in excess of EUR60,000, effective
from the tax year 2011.
50% exemption will be given to previously non-Cypriot
tax residents for employment in Cyprus if the income
from employment exceeds EUR100,000. The exemption
is given for five years starting from 1st January 2012.
The exemption applies irrespective of nationality (i.e. to
Cypriots and non-Cypriots).
14 // PKF International Tax Alert All Regions
Issue 8 November 2011