Double Tax Treaty Cyprus-France

An updated treaty for avoidance of double taxation (the “Treaty”) between Cyprus and France has been signed, replacing the previous Treaty that dated back to 1981.

The revised Treaty is aligned with the latest international rules and developments on taxation and further enhances the conditions for economic collaboration between the two countries.

The DTT is based on the latest OECD Model Tax Convention and introduces, amongst others, the minimum standards of the Base Erosion and Profit Shifting (BEPS) actions. It also incorporates the latest standards related to exchange of information, mutual agreement procedure, arbitration, principal purpose test and other amendments that have been bilaterally agreed upon.

The main provisions of the Treaty are as follows:

• Dividends: 0% withholding tax provided that, the beneficiary of the dividend is a company holding directly at least 5% of the capital of the dividend-paying company throughout a 365-day period (including the day of the payment). In all other cases the rate increases to 15%.
• Interest: 0% withholding tax
• Royalties: 5% withholding tax
• Capital gains derived by a resident of a Contracting State from the alienation of shares (or comparable interests) in property-rich companies may be taxed in the other Contracting State if, at any time during the 365 days preceding the alienation, such shares (or comparable interests) derive more than 50% of their value directly or indirectly from immovable property situated in that other State.

Signing the updated DTT between Cyprus and France is a significant step that paves the way to further investments for the mutual benefit of both countries and their people.

For a comprehensive list of the wide network of double tax treaties between Cyprus and other countries, please see our Information Sheet 7.

PGE&Co remains at your disposal for any clarifications and for further assistance that might be needed on this or on any other matter.