The Ministry of Finance has recently released an announcement according to which Cyprus has signed a double taxation agreement with Georgia. The Finance Minister, Harris Georgiades, stated that the agreement should enhance cooperation between the two countries but should also lead to more foreign investments in Cyprus and Georgia.
The Ministry of Finance announced that Cyprus has added another country to its double taxation agreements list at the end of May, when the new convention with Georgia was signed. The new tax agreement follows the Organization for Economic Co-operation and Development model and regulates the avoidance of double taxation of income and capital taxes and prevention of tax evasion.
Georgian representatives stated the new tax treaty would also provide numerous advantages for Georgian businessmen investing in Cyprus. They also declared the double taxation agreement creates the base of deeper economic ties between the two countries and provides the infrastructure for the implementation of new investment projects.
The double taxation agreement between Cyprus and Georgia will be enforced from January 1st, 2016, once both countries have ratified the treaty. The treaty will refer to the income, property and profits taxes in Georgia and for the Cypriot income tax, defense tax, capital gains and immovable property taxes. Dividends, interests and royalties will benefit from 0% withholding taxes when distributed to the Georgian or Cypriot shareholders.
Most double taxation treaties Cyprus amended or signed recently also contain provisions about the exchange of tax information. These provisions were included in the Cypriot domestic legislation since 2008 in order to improve the country’s reputation, especially with respect to its statute as a tax haven. Cyprus also wants to fulfill all the requirements of the Organization for Economic Co-operation and Development regarding tax information sharing that would lead to the country’s removal from the blacklists of several important countries.
For complete information about the island’s double taxation treaties you may contact our lawyers in Cyprus.
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