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Cyprus - Egypt Double Tax Treaty

A double tax treaty with Egypt was signed on 8 October 2019, the provisions of which will take effect on or after 1 January following the date the treaty enters into force.

Currently Egypt levies withholding taxes of 10% on dividends and 20% on interest and royalties. Under the Cyprus – Egypt double tax treaty the taxes that will be levied are as follows: -

  • Dividends – a 5% withholding tax is levied if the dividends are paid out to a foreign owner who holds at least 20% of the share capital of the company paying the dividends for a period of at least 365 days.
  • Interest – a 10% withholding tax is levied on interest payments if the recipient is the beneficial owner of such interest.
  • Royalties - a 10% withholding tax is levied on royalty payments if the recipient is the beneficial owner of such royalties.
  • Capital gains – the country of residence of the seller maintains the exclusive taxing rights arising from the disposal of shares. However gains derived by a resident of a contracting state from the alienation of shares or interest in the capital of a company which derives more than 50% of their value directly or indirectly from immovable property situated in that other contracting state, maybe taxed in that other contracting state, with the exception of gains derived from the alienation of shares listed on an approved stock exchange.

 

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