Contact us
Eurofinanzza Services
Who we are
Offshore Introduction
Incorporating Offshore
Why Going Offshore
Why and when should I use Offshore
How to select an Offshore Jurisdiction
Structure of an Offshore Company
The Offshore for US Citizens
Going Offshore - Quick Answers
FAQ
Offshore Applications
Tax Planning – UK Citizens Working Abroad
Offshore Tax Planning Solutions - Musicians
Asset Protection
Estate Planning
Panama as a Banking Centre
The Best Banking Centers in the World
Overseas Jurisdictions
General information
Australia
Australia - Company Formation
Australia – Register a Branch of Foreign Corporation
Australia Company Formation - Incorporation Fees
Australia – Foreign Investment Regulation
Australia - Banking System
Australia – Financial Services Licensing Regime
Belize
Incorporating in Belize
Advantages to incorporate in Belize
Belize IBC Incorporation Fees
Setting up a Trust in Belize
Trust in Belize - Incorporation Fees
Mutual Funds in Belize - Incorporation and Fees
Bank Formation in Belize
International Insurance Licenses in Belize - Incorporation Fees
British Virgin Islands
Incorporating in BVI
BVI - Guarantee Company Formation
BVI - Offshore Mutual Funds
BVI - Incorporation Fees
BVI - License Fees
Canada
Canada incorporation - Introduction
Canada - For non Profit Corporations
Canada - Taxation
Canada - Incorporating in British Columbia
Canada - Incorporating in Nova Scotia
Canada - Real Estate Use of Offshore Companies
Canada - Offshore for Canadian Citizens
Canada - Incorporation Fees
Cayman Islands
Cayman Islands - Tax Exempted Company - Compliance Information
Cayman Islands - Incorporation Fees
China
China Business Services Overview
Doing Business in China - Forms of Entities
China - Representitive Office
Advantages of Hong Kong Holding Structure
China JV and WOFE Memorandum
Cook Islands
Cook Islands - General Features
Cook Island - Compliance and General information
Cook Islands - Wealth Protection Law
Cook Islands - Private Trustee Companies
Cook Islands - Trust Incorporation
Cook Islands
Cook Islands - Trustee Company - Incorporation Fees
Cook islands - Anonymous Confidential Tax Planning Asset Protections Structures
Cook Islands - Anonymous Confidential Structures
Cook Islands - Trustee Company - Incorporation Fees
Costa Rica
Costa Rica - Compliance Information
Costa Rica Double Taxation Treaties
Costa Rica -E-Gambling Corporation
Costa Rica - Incorporation Fees
Gibraltar
Incorporating in Gibraltar
Gibraltar - Tax Exempt vs. Non-Resident Companies
Gribraltar - E-commerce
Gibraltar Incorporation Fees
Trust in Gibraltar
Trust Formation in Gibraltar – Incorporation Fees
Hong Kong
Incorporating in Hong kong
Hong Kong Company Requirements & Formation Procedures
HK Non Profit Organization Charitable Institution
Hong Kong - Double Taxation Treaties
Hong Kong Taxation
Hong Kong – Double Taxation Agreement with Mainland China
Hong Kong Incorporation Fees
Opening Corporate Bank Account in Hong Kong
India
History of India - Overview
Investing in India - Country Incentives and Policy
Company Formation in India - Compliance Information
Taxation System in India
Company Formation in India - Incorporation Fees
Registration of Licensed Online Pharmacy
Isle of Man
Incorporating in Isle of Man - Limited Liability Company
Incorporating in Isle of Man LLC - Incorporation Fees
Jersey
Jersey Offshore Company incorporation
Trust formation in Jersey
Trust Formation in Jersey Islands – Incorporation Fees
Incorporating in Jersey – Tax Exempted Company – Incorporation Fees
Madeira Islands
Madeira Offshore - an International Business Centre
Incorporating in Madeira Islands
Taxation and Tax Treaties
Madeira - Incorporation Fees
Madeira - Links and Downloads
Mauritius
Mauritius Offshore Incorporation
Mauritius GBCII – Incorporation Fees
Nevis
Nevis - Company Formation
Nevis - Corporate Structures
Nevis - Limited Liability Company
Nevis - Trust Formation
Nevis - Offshore Bank Formation
Nevis LLC – Limited Liability Company – Incorporation Fees
New Zealand
New Zealand - Jurisdiction Information
New Zealand Look-Through Companies (LTC)
New Zealand - Company Statutory Information
New Zealand - Company Limited by Shares - Incorporation fees
New Zealand Foreign Trust - Overview
New Zealand - Incorporation of Foreign Trust
New Zealand Foreign Trusts - Incorporation Fees
How to Incorporate your New Zealand Asset Protection Structure
New Zealand Financial Services Company
New Zealand Finance Companies – FSP Licensed - Registration Fees
Offshore Banking Software for Financial Institutions
Links, Resources, International Compliance and Banking Regulations
Panama
Panamanian IBC
Panamanian IBC - Incorporation Fees
Trusts & Foundations - General Overview
Panamanian Trusts
Panamanian Trusts - Incorporation Fees
Panamanian Private Interest Foundations
Panama – Private Interest Foundation – Incorporation Fees
Panamanian Financial Corporations - Formation and Fees
Panama – Mutual Funds and Investment Corporations
Panama - Offshore E-commerce Solutions - Services and Fees
Seychelles
Incorporating in Seychelles
Incorporating an IBC in Seychelles – Incorporation Fees
St. Vincent & Grenadines
St. Vincent & the Grenadines – Jurisdiction Information
Advantages to incorporate in St. Vincent & the Grenadines
St. Vincent & the Grenadines – IBC Incorporation
St. Vincent & the Grenadines – Trust Formation
St. Vincent & the Grenadines – Mutual Funds
St. Vincent & the Grenadines – Offshore Bank Formation
St. Vincent & the Grenadines – Insurance Companies
St. Vincent & the Grenadines – Legal and Taxation Regime
St. Vincent & the Grenadines – IBC Incorporation Fees
Turks & Caicos
Incorporating in Turks & Caicos
Turks & Caicos – IBC Formation – Incorporation Fees
United Arab Emirates (UAE)
Incorporating in Dubai
Advantages to Incorporate in Dubai
Company Formation in Dubai
Incorporating in Dubai - Incorporation Fees
United States of America
Incorporating in US - C vs S Corporations
Forming a “C” Corporation in USA Delaware - Fees
US LLC - Limited Liability Company - Tax Advantages
The State of California
The State of Delaware
Advantages to incorporate in Delaware
The State of Florida
The State of Nevada
The State of New York
The State of Oregon
US LLC - Incorporation Compliance
US LLC – Limited Liability Company – Incorporation Fees
Delaware Series LLC - Fractional Ownership Purposes
Delaware Series LLC - Fractional Ownership Purposes - Incorporation Fees
US - incorporation States
US Foundations - Non profit Corporations
US Foundations – Non Profit Corporations - Articles
US Foundations – Non Profit Corporations – By-Laws
US Corporation Annual Fees
Uruguay
Uruguay - Incorporation Features
Investing in Uruguay
Uruguay SAFI and SA Company Formation - Incorporation Fees
 
 
 
 
 

 

CYPRUS

 

DOUBLE TAXATION
PREVENTION TREATIES

 

DOUBLE TAX TREATIES
Cyprus has entered into 33 double-tax treaties (unusually for a low-tax jurisdiction). The general effect of these treaties is that Cyprus-registered offshore entities that have tax exemptions in Cyprus will have the same exemptions in the treaty countries.

In May 2001, Cyprus announced that it had entered into double tax negotiations with Iran, the Seychelles, Lebanon and Armenia. Talks have been concluded with Indonesia.

In February, 2003, the Cypriot government said it had signed an agreement for the avoidance of double taxation with Lebanon. According to a government statement, the agreement was signed in Beirut by Cyprus' Finance Minister, Takis Klerides, and his Lebanese counterpart, Fuad Siniora, and is designed to prevent both double taxation and fiscal evasion with regard to taxes on income and capital.

In July, 2005, Cyprus announced that a revised Double Tax Avoidance Agreement had been agreed with Germany. One of the more significant outcomes of the agreement is a clarification of taxation in the shipping sector. According to the new deal, profits from international ships and aircraft in international traffic "shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated".

The new agreement also clarifies the taxation of ships' crews who will be taxed according to the residential status of their employer, rather than according to an individual crew member's residential status, and includes provisions which seek to prevent fiscal evasion.

The new agreement will be particularly welcome to the large contingent of German ship-owning firms based on the island of Cyprus, which is the third-largest ship management centre worldwide after Singapore and Hong Kong.

In November, 2005, the Foreign Minister of San Marino, Fabio Berardi, who was in Cyprus on an official visit, met President Tassos Papadopoulos and signed a protocol which may lead to a Double Tax Avoidance Treaty between the two countries. Many Italian companies would be likely to use a San Marino/Cyprus axis in their international structures if there was a DTAA.

In December, 2005, the head of the Russian tax service, Anatoly Serdyukov, announced that double taxation avoidance agreements will be reviewed to prevent companies from avoiding tax by registering offshore, and to "protect Russia's economic interests". According to Mr Serdyukov, the federal budget was deprived of more than $2 billion in unpaid profit tax by oil firms during 2004 because the owners of these firms are resident for tax purposes in low tax jurisdictions, such as Cyprus.

 

 

"We think it would make sense to check all agreements on double taxation avoidance to protect Russian economic interests and see whether they correspond to current legislation," Mr Serdyukov reportedly told a meeting of the tax service.

It's not clear whether Russia would be able to take any unilateral action to restrict users of the Cyprus tax treaty.

In July, 2006, the governments of Cyprus and the Seychelles have agreed to a new bilateral pact which aims to prevent the double taxation of income, and boost investment flows between the two countries.

The agreement was signed in the Seychelles last week by the Seychelles' Minister for Economic Planning and Employment, Jacquelin Dugasse, and the Cypriot Minister for Finance, Michalis Sarris.

“The signing is for us in Seychelles very important as it provides the framework which will enable businesses in our two countries to exploit the business ties and cooperation which exist,” Minister Dugasse commented after the formalities had been completed.

The bulk of any new investment is expected to originate initially from Cyprus, but Dugasse argued that there is no reason why investors in the Seychelles could not also capitalise on the agreement.

Cyprus has also shown "keen interest" in starting negotiations towards a a Bilateral Investment Promotion and Protection Agreement.

Most treaties follow the OECD Model Convention, although the US Treaty follows the most recent model of United States Agreements. Normally speaking, therefore, the country of residence will give a credit for taxes paid in the other treaty country. The Cyprus offshore entity qualifies for treaty protection under all the extant treaties except those with Canada, France, the UK and the USA, and even in those cases the limitations apply only to flows of income to Cyprus, and not to income flows from Cyprus to the countries concerned.

Revisions to Cyprus's corporate tax regime consequent upon its accession to the EU, and the abolition of the 'offshore' sector as such, have made Cyprus more rather than less attractive as a tax treaty partner, and the island will need to revise many of its treaties as a result, as well as entering new treaties with additional countries.

The following countries have double-tax treaties with Cyprus (an * indicates that the treaty is awaiting ratification):

• Armenia*
• Austria
• Belgium
• Bulgaria
• Canada
• China
• CIS (ex-USSR)
• Czech Republic
• Denmark
• Egypt
• Federal Rep. of Germany
• Finland*
• France
• Greece
• Hungary
• India
• Ireland
• Italy
• Japan*
• Kuwait
• Malta
• Mauritius
• Norway
• Poland
• Romania
• Russia
• Singapore*
• Slovakia
• South Africa*
• Sweden
• Syria
• Thailand
• Ukraine*
• United Kingdom
• United States
• Yugoslavia (Serbia and Montenegro)

The new Russian treaty signed in December 1998 replaces the USSR (CIS) treaty as regards Russia but not as regards the other member states of the CIS, who remain bound by the old treaty. The differences are relatively minor.

CYPRUS TAX SPARING PROVISIONS
A tax-sparing provision has the effect that if tax is 'spared' ie exempted in Cyprus, then it is credited against an investor's tax liability in his home country (the treaty counterpart) as if it had actually been paid in Cyprus. There are tax-sparing provisions in the treaties with the following countries:

• Canada
• Czech Republic
• Denmark
• Federal Republic of Germany
• Greece
• India
• Ireland
• Italy
• Malta
• Romania
• Slovakia
• Sweden
• Syria
• United Kingdom
• Yugoslavia

The taxes all or partly spared are as follows:

- Tax on interest paid on loans for economic development in Cyprus (Canada, Denmark, Germany, France, UK)
- Tax relieved because of deductions in respect of investment in Cyprus (Canada, UK)
- Tax on interest or profits which is unpaid because of tax incentives, reliefs or exemptions in Cyprus (Czech Republic, Greece, Ireland, Romania, Slovakia, Yugoslavia)
- Tax not withheld on dividends (15%) if the exemption is given for the purposes of economic development in Cyprus (Denmark, Germany, France)

CYPRUS TABLE OF TREATY RATES
(Excluding treaties not yet in force; references to notes are in parentheses after the rates, and apply to payments in both directions unless otherwise specified; all rates are percentages; for countries not listed the rules are too complex to be stated here.)

Country

Dividends

Royalties

Interest

Rcvd. in Cyprus

Paid from Cyprus

Rcvd. in Cyprus

Paid from Cyprus

Rcvd. in Cyprus

Paid from Cyprus

Austria

10

10

nil

nil

nil

nil

Belgium

10

10

10

10

nil

nil

Bulgaria

nil

nil

nil

nil

nil

nil

Canada

15

15

10

10 (8)

15

15 (11)

China

10

10

10

10

10

10

CIS

nil

nil

nil

nil

nil

nil

Czech Rep.

10

10

5

5 (9)

10

10 (12)

Denmark

10

10 (1)

nil

nil

10

10 (13)

Egypt

15

15

10

10

15

15

France

10

10 (2)

nil

nil (10)

10

10 (13)

Germany

15

15 (3)

nil

nil (10)

10

10 (12)

Greece

25

25

nil

nil

10

10

Hungary

5 (1)

nil

nil

nil

10

10 (12)

India

15

15 (2)

15

15

10

10 (12)

Ireland

nil

nil

nil

nil (10)

nil

nil

Italy

15

nil

nil

nil

10

10

Kuwait

10

10

5

5 (9)

10

10 (12)

Malta

(4)

15

10

10

10

10

Mauritius

nil

nil

nil

nil

nil

nil

Norway

nil

nil (5)

nil

nil

nil

nil

Poland

10

10

5

5

10

10

Romania

10

10

5

5 (9)

10

10 (12)

Russia

5/10

5/10

nil

nil

nil

nil

Slovakia

10

10

5

5 (9)

10

10 (12)

Sweden

15

10 (1)

nil

nil

10

10 (12)

Syria

nil

nil (1)

15

15 (16)

10

10

Thailand

10

10

10

10

5/10/15

5/10/15

UK

15

nil (6)

nil

nil (10)

10

10

USA

5

nil (7)

nil

nil

10

10 (14)

Yugoslavia

10

10

10

10

10

10

 

Notes:

(1)



15% if received by a company holding directly less than 25% of the capital

(2)

15% if received by a company holding directly less than 10% of the capital

(3)

10% if received by a company holding at least 25% of the capital of the paying company. However, if German corporation tax on distributed profits is lower than that on undistributed profits and the difference between the two rates is 15% or more, the withholding tax is increased from 10% to 27%. In all other cases it is 15%.

(4)

Withholding tax shall not exceed the tax chargeable on the profits out of which the dividends are paid.

(5)

5% if received by a company controlling less than 50% of the voting power.

(6)

If received by a company controlling less than 10% of the voting power, thus entitled to refund of excess ACT deducted in the UK (if it controls more than 10% of the voting power, it is not entitled to the refund).

(7)

15% if received by a company controlling less than 10% of the voting power.

(8)

Nil on literary, dramatic, musical or artistic work.

(9)

Nil for literary, artistic or scientific work, film, and TV royalties.

(10)

5% on film and TV royalties.

(11)

Nil if paid to a Government or for export guarantee.

(12)

Nil if paid to the Government of the other state.

(13)

Nil if paid to the Government of the other state, in respect of bank loans, in connection with the sale on credit of any industrial, commercial or scientific equipment or any merchandise.

(14)

Nil if paid to a Government, banks or financial institutions.

(15)

Nil if royalties are on literary, artistic or scientific work including films, TV films and radio broadcasting.

(16)

10% on copyright of literary, artistic or scientific work including cinematography films and films or tapes for TV or radio broadcasting.

 

 

OFFSHORE INCORPORATION SERVICES
COMPANY FORMATION & MANAGEMENT SERVICES
TAX PLANNING AND ASSET PROTECTION SOLUTIONS
INTERNATIONAL BUSINESS COMPANIES
HOLDING COMPANIES
PRIVATE LIMITED COMPANIES
LIMITED LIABILITY COMPANIES
LIMITED LIABILITY PARTNERSHIPS
TRUSTS
PRIVATE & FAMILY FOUNDATIONS
BANK FORMATION
PANAMANIAN LICENSED FINANCIAL CORPORATIONS
NEW ZEALAND OFFSHORE FINANCIAL INSTITUTIONS
SECURE & CONFIDENTIAL NOMINEE STRUCTURES
INCORPORATION IN EUROPE AND
MAJOR INTERNATIONAL OFFSHORE CENTRES
OFFSHORE BANKING
WORLDWIDE FULL SERVICED VIRTUAL OFFICES

FREE CONSULTANCY

info@eurofinanzza.com

European Jurisdictions
Andorra
Austria
Cyprus
Czech Republic
Denmark
France
Greece
Hungary
Italy
Latvia
Liechtenstein
Luxembourg
Malta
The Netherlands
Portugal
Republic of Ireland
Spain
Sweden
Switzerland
United kingdom
Shelf and Aged Companies
Nominee Structures
Virtual Offices
Offshore Banking
Offshore e-Commerce
VAT
Website Design
Relative Services
Currency converter
Contact us
Menu