The Cyprus government’s fiscal policy clearly embraces tax incentives for foreigners, which act as a considerable inducement for those wishing to conduct international business on the island. One of the simplest indicators of this intention is the high number of double taxation treaties that Cyprus has executed with other countries.
Double taxation treaties operate as vehicles for international business because they are an important tool in facilitating the appeal of commercial transactions within a jurisdiction and give considerable advantage to those undertaking business in participating countries by offering certainty and constancy.
Double taxation occurs when two different countries charge one person (legal or natural) tax on the same financial transaction. In the interests of equity, this effect is mitigated by jurisdictions that execute double taxation treaties.
A double taxation treaty will usually operate by allowing a credit to be issued against the taxes due in the taxpayer’s resident country for the taxes paid in the other treaty country. The effect of this is that the taxpayer pays no more in tax on the transaction than the higher of the two jurisdiction’s rates.
Cyprus has executed almost 50 such treaties, most of which follow the OECD (Organization of Economic Cooperation and Development) model that is amended where necessary to conform to the various jurisdictions concerned. The US agreement is a notable exception that follows the US Model.
The countries with which Cyprus has signed a double tax treaty are as follows:[1]
| State | Date of entry into force |
| Austria | 10 Nov 1990 |
| Bulgaria | 3 Jan 2001 |
| Belarus | 12 Feb 1999 |
| Belgium | 8 Dec1999 |
| Canada | 3 Sep1985 |
| China | 5 Oct 1991 |
| Denmark Treaty Notes New Agreem.* | 10 Aug 1981 10 Apr 1982 7 Sept 2011 |
| Egypt | 14 Mar1995 |
| France | 1 April 1983 |
| Germany new Agreement | 11 Oct 1977 16 Dec 2011 |
| Greece | 16 Jan 1969 |
| Hungary | 24 Nov 1982 |
| India | 21 Dec 1994 |
| Ireland | 12 Jul1970 |
| Italy Treaty Protocol (Additional Protocol) | 9 June 1983 |
| Kuwait (New Agreement) | 25 Sep 1986 |
| Lebanon | 14 Apr 2005 |
| Malta | 11 Aug 1994 |
| Mauritius | 12 Jun 2000 |
| Norway | 1 Jan 1955 |
| Poland | 9 Jul 1993 |
| Romania | 8 Nov 1982 |
| Russia (Amendment Protocol) | 17 Aug 1999 |
| South Africa | 8 Dec1998 |
| Sweden | 14 Nov1989 |
| Syria | 22 Feb 1995 |
| Singapore | 8 Feb 2001 |
| Thailand | 4 April 2000 |
| United Kingdom Treaty Protocol | 1 Nov1974 |
| USA | 31 Dec 1985 |
| Serbia* | 8 Sep1986 |
| Montenegro* | 5 Nov 2008 |
| Slovenia* (New Agreement) | 8 Sep 1986 14 Sept 2011 |
| Slovakia** | 30 Dec 1980 |
| Chech Republic** (new agreement) | 30 Dec 1980 26 Nov 2009 |
| Ajerbaizan*** | 26 Aug 1983 |
| Armenia | 19 Sept 2011 |
| Kyrgyzstan*** | 26 Aug 1983 |
| Moldavia | 03 Sept 2008 |
| Tanzikistan*** | 26 Aug 1983 |
| Uzbekistan*** | 26 Aug 1983 |
| Ukraine*** | 26 Aug 1983 |
| Seychelles | 27 Oct 2006 |
| San Marino | 18 July 2007 |
| Quatar | 20 Mar 2009 |
| United Arab Emirates | Pending |
Notes
*7 Denmark – The existing Convention shall cease to have effect as from 1.1.2012
* The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is
still in force. It shall cease to apply between Cyprus and Slovenia as from 1.1.2012
** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in
force.The said treaty has ceased to apply between Cyprus and Chech Republic as
from 1.1.2010, date of application of the provision of the new agreement.
***The treaty between Cyprus and the Union of Soviet Socialist Republics
is still in force.
[1] As listed by the Ministry of Finance at www.mof.gov.cy/mof
