On 1 June 2021 the Republic of Cyprus and the Netherlands have signed a Double Tax Treaty for the first time.

The treaty follows the provisions of the OECD Model Tax Treaty and aims to eliminate double taxation with respect to taxes on Income. Also, it aims to prevent tax evasion and tax avoidance. As a result it will contribute to the additional development of economic and trade relations between the two countries and promote investment opportunities.   

The Treaty will be in effect in the year following the year in which the ratification process in both countries is finalised.

The taxes that are covered by the treaty are the followings:


DIVIDENDS:

Dividends paid by a company which is a tax resident in a contracting state to a tax resident of the other contracting state will be taxed in that state. In this respect, the withholding tax on dividends will not exceed 15% of the gross amount of dividends.

However, dividends will be exempt from withholding tax provided that the dividends are beneficially owned by:

  • A recipient that holds at least 5% of the share capital of the dividend paying company for a period of at least one year.
  • A recipient that is a recognized pension fund of the other Contracting State.


INTEREST:

There is no withholding tax on interest as far as the recipient is the beneficial owner of the income.


ROYALTIES:

There is no withholding tax on royalties as far as the recipient is the beneficial owner of the income.


CAPITAL GAINS:

Gains derived by a tax resident of a Contracting state from the alienation of shares or comparable interest deriving more than 50% of their value directly or indirectly from immovable property situated in the other Contracting state, might be taxed in that other state.


H
ow we can help?

ConnectedSky Legal & Corporate Consultants Limited, through its dedicated team of business consultants, lawyers, accountants and tax experts will be happy to advise any client as to the obligations deriving from the launching of the Beneficial Owner Register and/or to undertake the relevant submission at the Registrar.


Contact us: 

Tel: +357 22 258800

Fax: +357 22 258801

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Contact us

Igoumenitsas 12,
CONNECTEDSKY HOUSE, P.C. 2027,
Strovolos, Nicosia, Cyprus

Tel:
70003517 in Cyprus
+357 22258800 from abroad

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+357 22258801

Email: info@connectedsky.com