Cyprus France Double Taxation Treaty

Cyprus-France Double Taxation Treaty

Updated on Monday 26th October 2015

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Cyprus-France-Double-Taxation-TreatyDouble taxation agreement between Cyprus and France

Cyprus and France have signed an agreement against double taxation and fiscal evasion at the end of 1981. The agreement covers the income and the capital taxes in both countries and applies to French and Cypriot residents. The agreement applies on the total income or elements of income as it follows:

  • -          the income, the corporate, withholding taxes and any prepayment or advance payments in France,
  • -          the income tax in Cyprus.

The Cyprus-France double taxation agreement also covers any similar taxes applied in both countries. Moreover, any change in one of the contracting states’ taxation system will be brought to the attention of the other state.

Definitions in the Cyprus-France double tax treaty

According to the double taxation agreement between Cyprus and France, both individuals and corporate entities have the right to benefit from the convention’s provisions. The avoidance of double taxation will be applied based on tax residency.  For natural persons, tax residency is applied based on domicile or residence in Cyprus or France, while for companies it applied based on residence or place of management. The Cyprus-France double taxation treaty also defines “permanent establishments” as being a fixed place of doing business of a French or Cypriot company in the other state for more than a calendar year. Branch offices, construction sites, offices and other places of management are considered permanent establishments under the Cyprus-France double taxation treaty.

For more information about the double taxation agreement with France you can refer to our Cypriot lawyers.

Avoidance of double taxation in Cyprus and in France

The elimination of double taxation in Cyprus and France will be done as it follows:

  • -          a credit against any tax payable in Cyprus related to incomes derived in France, in the case of Cyprus,
  • -          exemptions from French taxes paid in Cyprus, in the case of France.

Under the Cyprus- France double taxation treaty, the following reduced tax rates apply:

  • -          a 10% tax rate on the dividend tax if the company receiving the dividends owns at least 10% in the company paying them and 15% in all other cases,
  • -          a 10%  tax rate on interests,
  • -          a maximum tax rate of 5% on royalty payments.

For complete information about the country’s double taxation agreements, please contact our law firm in Cyprus.