Cyprus - Canada Double Tax TreatyUpdated on Sunday 30th October 2016
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Cyprus and Canada signed a treaty for the avoidance of double taxation in 1986, establishing the terms and conditions for the tax residents of the two members-states operating taxable activities in the contracting states. It provides a comprehensive image on the taxation of business profits and its sets a ground for the avoidance of tax evasion. Canadian businessmen who want to operate of the Cypriot market may address their inquiries on the provisions of the treaty to our lawyers in Cyprus.
Taxes under the Cyprus- Canada double tax treaty
The taxes applicable under the Cypriot – Canadian double taxation agreement (DTA) are mutually available for the tax residents of the two states. This means that Canadian natural persons and legal entities operating in Cyprus will be taxed in accordance with the stipulations of the agreement. In this sense, Article 2 prescribes the following taxes:
• the income tax;
• the special contribution imposed by the regulations of the Cypriot government.
Further on, the Cypriot residents will be taxed in Canada for the income taxes prescribed by the Canadian government.
Article 4 of the document gives a comprehensive image on the definition of residency in one of the contracting state. The taxes are applicable in terms of domicile, residency, place of management or on any other situations that fall under this category. Our attorneys in Cyprus can provide more details on this matter.
Permanent establishment in Cyprus
Businessmen who are tax residents in Canada, operating a company in Cyprus, will be taxed here in accordance with the regulations referring to the permanent establishment, which refers to a wide range of places of management in which the activities of the foreign company are carried out. In this sense, we mention the following:
• a branch;
• an office;
• a factory;
• a workshop;
• a shop and similar premises;
• a mine and other businesses set up for the extraction of natural resources;
• a farm or a plantation site;
• a business related to the extraction of timber.
The term also takes into consideration a building site, but only in the situation in which the operations are carried out on continuous basis longer than six months.
We invite businessmen to contact our law firm in Cyprus for more details on the Cyprus – Canada double taxation agreement.