A Double Tax Treaty was signed between Cyprus and Spain on 14th February 2013.
The treaty will enter into force three months after its ratification and for taxes on income and capital at the beginning of the year following the date the treaty enters into force.
The most important provisions of the treaty 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.
- 5% applies in all other cases
Interest
Interest payments will not be subject to any withholding tax;
Royalties
0 % withholding tax applies to income arising from Copyrights, artistic or scientific work including films, any patents and trademarks.
Capital gains
-Capital gains from the disposal of immovable property are taxed in the country where the immovable property is situated.
-Capital Gains from the direct sale of shares in “property-rich” companies are taxed in the country where the immovable property is situated.
-Capital gains from the disposal of any other type of shares are taxed in the country in which the seller is resident.
Following the enforcement of the Double Tax Treaty, Cyprus will be removed from the so called Spanish ‘black list’ and this should encourage investments between the two countries.
The treaty will enter into force three months after its ratification and for taxes on income and capital at the beginning of the year following the date the treaty enters into force.
The most important provisions of the treaty 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.
- 5% applies in all other cases
Interest
Interest payments will not be subject to any withholding tax;
Royalties
0 % withholding tax applies to income arising from Copyrights, artistic or scientific work including films, any patents and trademarks.
Capital gains
-Capital gains from the disposal of immovable property are taxed in the country where the immovable property is situated.
-Capital Gains from the direct sale of shares in “property-rich” companies are taxed in the country where the immovable property is situated.
-Capital gains from the disposal of any other type of shares are taxed in the country in which the seller is resident.
Following the enforcement of the Double Tax Treaty, Cyprus will be removed from the so called Spanish ‘black list’ and this should encourage investments between the two countries.
