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HMRC internal manual

Double Taxation Relief Manual

Cyprus: Treaty summary

Treaty summary

The table summarises the provisions of the treaty in force. Where a percentage rate is shown, this rate is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Cyprus are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.

In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details.

Portfolio dividends 0% Article 10
     
Dividends on direct investments 0% Article 10
Conditions for lower rate on dividends on direct investments The beneficial owner must be a resident of the UK Article 10
Property income dividends 15% (Note 1) Article 10
Interest 0% Article 11
Royalties 0% Article 12
Government pensions Taxable only in the UK (note 2) Article 18
Other pensions Taxable only in Cyprus  unless the individual is a resident of, and a national of, the UK Article 17
Arbitration Yes Article 25

 

Note 1: Dividends paid out of income derived directly or indirectly from immovable property, where the beneficial owner of the dividends is a pension scheme established in Cyprus, shall be exempt from tax in the UK.

Note 2: The 2018 Protocol amends the Entry into Force provision of the 2018 Convention so that a person in receipt of a government service pension can elect to continue to be taxed in accordance with the provisions of the 1974 agreement for a period of up to 5 years ending on or before 31 December 2024.