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HMRC internal manual

International Manual

DT Agreements: Cyprus - Income from a UK source paid to a resident of Cyprus

Changes to the system of taxation in Cyprus

Until 1 January 2003 the Cyprus tax code contained provisions that could be used toreduce or eliminate any liability to tax in Cyprus. Because of these provisions in Cyprustax law we ask claimants the additional questions on the “X/Cyprus/slip”.

With effect from 1 January 2003, Cyprus changed its law so that individuals wholive in Cyprus for more than 183 days in a tax year (January to December) are treated asresident in Cyprus and they are liable to tax in Cyprus on their worldwide income.

Subject to some transitional rules that apply until 31 December 2005, companies thatare managed and controlled in Cyprus will be liable to tax on their income in Cyprus.

This means that individuals and companies who could not previously claim treaty benefitsare now able to do so.

See also INTM348060 ‘Special Tax Benefits’.