Cyprus Agrees Double Tax Pact With Iceland

Cyprus and Iceland have released the text of a new double tax agreement signed between the two nations on November 14, 2014.

The signing took place at the Embassy of Cyprus in Stockholm. The agreement caps the withholding tax on dividends income at source to five percent, if the recipient owns at least ten percent of the company paying the dividend. The rate on royalties and interest income is capped at five percent. According to the agreement, the deduction method (credit method) is applied in order to avoid double taxation.

The Cyprus Investment Promotion Agency said: “Updating, maintaining existing, and signing new double taxation treaties is part of the drive to enhance and attract foreign investments, as well as of promoting Cyprus as an international business hub.” Cyprus has double taxation treaties with more than 50 countries.