(a) Capital gains tax is imposed on the gain from the alienation of immovable property situated only in Cyprus.
(b) Cyprus does not impose withholding taxes on dividends or interest payments to non – residents.
(c) Cyprus does not impose withholding taxes on royalty payments relating to the use of rights outside Cyprus.
Cyprus has an advanced tax planning culture based on the country's extensive network of double tax treaties. The jurisdiction has the lowest fixed corporate tax rate in the EU of 10% and also has the lowest possible VAT rate of 15%.On April 16 2009, ...
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Cyprus has an advanced tax planning culture based on the country's extensive network of double tax treaties. The jurisdiction has the lowest fixed corporate tax rate in the EU of 10% and also has the lowest possible VAT rate of 15%.
On April 16 2009, Cyprus and Russia signed a protocol to the 1998 tax treaty between the two countries. The protocol is expected to be ratified by both countries in 2009 so that it will become effective as from January 1 2010.
The outcome of more than 12 months of negotiations, the protocol is viewed as beneficial to international business as it will encourage investment and will continue to foster and encourage economic relations between Cyprus and Russia through one of the most favourable treaties the Russian Federation has concluded.
Russia has also agreed to remove Cyprus from its blacklist of uncooperative jurisdictions which will mean that dividends received by Russian companies from Cypriot subsidiaries can qualify for the Russian dividend participation exemption.
Cyprus is now the best jurisdiction from which to invest in Russia. There have also been changes in legislation to aid treaty compliance. An amendment has been made to the tax legislation to facilitate the provisions of article 26 of the OECD model convention found in the double tax treaty agreements entered into by Cyprus. This has strengthened Cyprus as a financial centre. This has been further aided by the fact that there is no withholding tax on interest and royalties.
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