Cyprus – Poland Double Taxation Treaty
Cyprus – Poland Double Taxation TreatyUpdated on Monday 10th July 2017
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The Cyprus – Poland double taxation treaty is one of the numerous tax treaties signed by Cyprus. It was concluded in 1992, being applied as of 1993. The double tax treaty had certain amendments added which became effective since 2012.
The treaty is extremely favorable and it offers, in combination with an investor-friendly tax system like the one in Cyprus, multiple benefits for international investors. Our lawyers in Cyprus can offer more information on the tax agreement between Cyprus and Poland.
Taxation of business profits according to the Cyprus-Poland double tax treaty
According to the Cyprus – Poland double tax treaty, business profits are taxed as follows:
• The profits of a business established in one of the two jurisdictions is taxed only in the state where it carries out activities, except for when it carried on activities in the other jurisdiction through a permanent business entity located there;
• If a business carries on activities in the other jurisdiction through a permanent business entity located there, the business will be taxed in each jurisdiction as if it was a regular company;
• When determining the profits of a permanent business entity, there are certain deduction expenses which are allowed, including general and executive administration expenses;
• Other provisions: our Cypriot lawyers can provide further details on what these other provisions consist of.
Provisions of the 2012 protocol between Cyprus and Poland
Some of the most important provisions of the Cyprus – Poland double taxation agreement protocol signed in 2012 are:
• The withholding interest tax rate was reduced from 10% to 5%;
• The withholding royalty tax rate remains at 5%;
• The withholding tax rate on dividends was reduced from 10% to 0%, provided that the shareholding company owns minimum 10% of the share capital of the business which is distributing the dividends. Our attorneys in Cyprus are able to offer more details on this subject;
• The director fees gained by a person are only taxed in the jurisdiction where that person resides.
For more information about the Cyprus – Poland double taxation convention, we invite you to get in touch with our Cypriot law firm.