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Cyprus - Luxembourg Double Tax Treaty

A double tax treaty with Luxembourg will come into effect on 1st January 2019.

The main provisions of the treaty are as follows: -

  • Dividends - no withholding tax will be levied on dividend payments where the recipient is a company, being the beneficial owner of the dividends and holds at least 10% of the capital of the dividend paying company. If the above are not met then withholding tax to a maximum of 5% will be levied.
  • Interest - no withholding tax will be levied on interest payments made where the recipient is the beneficial owner of the interest, unless the interest arises from a permanent establishment situated in the other State. The exemption does not apply in the case where the interest paying and receiving entities are connected and the interest rate exceeds the rate that would be applied in an arm’s length transaction.
  • Royalties - no withholding tax will be levied on royalty payments where the recipient is the beneficial owner of the royalties. The exemption does not apply where the royalty paying and receiving entities are connected parties and the royalties exceed the charge that would be applied in an arm’s length transaction.
  • Capital gains – the one’s arising from the disposal of shares of a company will be taxable only in the State of residency of the seller, unless more than 50% of the value of such shares is derived directly from immovable property situated in the other State.

Latest news

Extension to the filing date of tax returns

The following deadlines have been extended by the Cyprus government for the filing of tax returns by companies and individuals: The last date for the filing of an individual's tax return (IR1) for the year 2020 and settlement of any tax due will be 30 September 2021 without the imp...…

Published: Saturday 24 April, 2021

Extension for filing of corporate tax returns

On 12 March 2021 the Tax Department issued an announcement in relation to the extension of the deadlines for the submission of the 2019 corporate income tax return and the 2019 income tax return filed by individuals preparing audited Financial Statements. The above deadlines are extended to 30 Se...…

Published: Saturday 27 March, 2021

Interest and dividends – declarations through Taxisnet

There are new declarations on Taxisnet through which Special Defence Contributions and GESY should be recorded on the payment of interest and dividends. The printed forms 61AT and 61AM are now also available in electronic form and can be submitted through the Taxisnet as follows: …

Published: Wednesday 27 January, 2021