On Thursday the 23rd of March 2018 Cyprus signed an updated double taxation agreement with the United Kingdom in regards to capital gains, Income taxes and Tax evasion and avoidance.
The agreement signed by the Finance minister Harris Georgiades and British High Commissioner Matthew Kidd in Nicosia updates the one signed in 1974. It includes making dispute resolution mechanism more effective and minimum standard of action on base of erosion and profit shifting in regards to bilateral treaties. The treaty is based on OECD model convention that plays a significant role in removing tax related barriers to cross border trade and investment. Double taxation applies where tax is applied on the same income by two different jurisdictions. Countries agree to tax agreement to prevent double taxation. It also prevents Cypriot business with establishments abroad being subjects to tax discriminations and assures trade between nations.
A statement from the treaty states that updating, extending and maintaining the current treaties network to eliminate double taxation are of both political and economic importance. The aim is to attracting and boosting foreign investment while promoting Cyprus as an international business center. Currently, Cyprus has signed double tax treaties with over 60 other countries such as Malta, France, Greece, Qatar, Canada, India, Germany and Belgium.
The main advantages of the double taxation treaties include clarification of taxing rights of each state. Taxing rights under the treaty Updated double taxation agreements in Cyprus and further tax advantages
A statement from the treaty states that updating, extending and maintaining the current treaties network to eliminate double taxation are of both political and economic importance. The aim is to attracting and boosting foreign investment while promoting Cyprus as an international business center. Currently, Cyprus has signed double tax treaties with over 50 other countries such as Malta, France, Greece, Qatar, Canada, India, Germany and Belgium.
The main advantages of the double taxation treaties include clarification of taxing rights of each state. Taxing rights under the treaty to particular country residents and allows clarification of states taxation rights. It helps in avoiding double international taxation where same profits are taxed on corporate and individual. The double taxation treaties also prevent tax evasion. It enables the countries to obtain information to ensure taxing rights are preserved and clarifying taxable income.
More importantly, the treaties provide a mechanism for resolving issues that might arise on taxation. The resident of a contracting state can present his case if there is a case of tax being imposed twice. Therefore there is no need to seek solutions from the country he is not a resident at. Lastly, double taxation agreement provides information exchange agreement on taxation matters between countries. Consequently, at global levels, the commercial relationships are strengthened and provide development of different tax regime mutual understanding to particular country residents and allow elucidation of states taxation rights. It helps in avoiding double international al taxation where same profits are taxed on corporate and individual. The double taxation treaties also prevent financial evasion. It enables the countries to obtain information to ensure taxing rights are preserved and clarifying taxable income. More importantly, the treaties provide a mechanism for resolving issues that might arise on taxation.
