Cyprus and Saudi Arabia signed a Double Tax Treaty
The double tax treaty for the avoidance of double taxation between Cyprus and Saudi Arabia was signed on 3 January 2018. The treaty is expected to be ratified and come into force as from 1 January 2019.
The new treaty is based on the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention framework, with some modifications.
The treaty applies to taxes on income as well as on gains from alienation of movable or immovable property. In the case of Saudi Arabia, the treaty covers the Zakat and the income tax (including the natural gas investment tax), whereas, in the case of Cyprus, it covers corporate and personal income tax, defense tax and capital gains tax.
The treaty provides for withholding taxes on dividends at the following rates:
There is no withholding tax on interest, as long as the recipient of the interest is the beneficial owner of the income.
The treaty provides for withholding taxes on royalties at the following rates (as long as the recipient of the royalties is the beneficial owner of the income):
The treaty provides that gains arising from the disposal of shares of a substantial participation in the capital of a company which is resident of a Contracting State may be taxed in that Contracting State.
A person is considered to have a substantial participation when this participation is at least 25% of the capital of that company, at any time within twelve months prior to the disposal of the shares.
Source: Gold News