Cyprus: Tax Treaties

Cyprus has fundamentally changed how it taxes outbound dividends, interest, and royalties paid to associated companies. Depending on where the receiving shareholder is located, the same payment can now attract 0%, 5%, or 17% withholding tax—or trigger a complete denial of the deduction. Most international groups have not yet reviewed their ownership structures against these new rules, which took effect on 1 January 2026 and apply automatically based on the recipient's jurisdiction.

Cyprus removed a key barrier to its 60-day tax residency rule in January 2026, allowing applicants to qualify even if another country still claims them as tax resident. The change shifts the resolution of competing residency claims from domestic statute to double tax treaty tie-breaker provisions, fundamentally altering how internationally mobile business owners and executives can establish Cyprus tax residency.

People moving to Cyprus often want to know how the country will tax their dividends, interest and other income. The answer starts with two separate questions: are they tax resident in Cyprus, and where are they domiciled? A residence permit, a property purchase or a Cyprus company does not answer either question by itself.

A question we hear constantly from international clients is whether a Cyprus company managed from abroad actually saves tax when the owner lives and works outside Cyprus.

The first-time Double Tax Treaty (DTT) between the Republic of Cyprus and The Kingdom of The Netherlands, signed on 1 June 2021, came into force on 30 June 2023 and its provisions are applicable as from 1 January 2024 onwards.

For international businesses with UAE operations, the Cyprus UAE holding structure has moved from a niche advisory conversation to a mainstream planning consideration.

To determine which Double Taxation Treaty (DTT) applies to a specific transaction in Cyprus, a structured approach is followed that considers the nature of the transaction, the parties involved, and relevant treaty...

Cyprus has steadily strengthened its tax framework in line with evolving international standards on transparency, substance, and anti-avoidance.

The Cyprus Non-Domicile regime (or non-dom) hinges on a person's domiciliation.