Double tax treaties: Cyprus/Latvia and Cyprus/Bahrain

BusinessLegal

  • Author Michael Chambers
  • Published June 30, 2016
  • Word count 471

The double tax treaty between the Republic of Cyprus and the Republic of Latvia will strengthen the economic and commercial relations between the two countries. The Treaty was signed by the Minister of Finance of the Republic of Cyprus, Harris Georgiades, and the Minister of Economics of the Republic of Latvia, Dana Reizniece-Ozola, in Brussels on 24 April 2016. It should be pointed out that the Treaty is based on OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.

As stated in the announcement, published on the website of the Cyprus Ministry of Finance, the Treaty will contribute to the further development of commercial and economic relations between the Republic of Cyprus and the Republic of Latvia, as well as with other countries. In addition, the update, maintenance and expansion of the existing network of Treaties for the Avoidance of Double Taxation, which is of a great economic and political importance, focus on reinforcing and attracting foreign investments and promoting Cyprus as an international business centre.

CYPRUS-BAHRAIN DOUBLE TAX TREATY ENTERED INTO FORCE

The Government of the Kingdom of Bahrain and the Government of the Republic of Cyprus concluded an Agreement for the avoidance of double taxation with respect to taxes on income, based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital. The double taxation treaty between Cyprus and Bahrain will strengthen the economic and commercial relationships between the two countries.

The treaty was signed in Manama in March 2015 during the official visit of the President of the Republic of Cyprus, Nikos Anastasiades, to the Kingdom of Bahrain. The treaty entered into force on 26 April 2016 and it applies to individuals who are residents of Cyprus or Bahrain. The Agreement also applies to individuals who reside in both countries. According to article 2, of the Agreement, the Cyprus taxes include the income tax, the corporate income tax, the special contribution for the defence and the capital gains. The Bahrain tax includes ‘’The Oil Tax’’.

The treaty provides zero withholding tax on payments of dividends, interests and royalties. Regarding capital gains derived by a resident of a Contracting State from the alienation of immovable property and situated in the other Contracting State may be taxed in that other State. Additionally, gains from the alienation of movable property forming part of business assets of a permanent establishment which an entity of a Contracting State has in the other Contracting State, as well as, gains from the alienation of a permanent establishment, shall be taxed in that other State .

Cyprus is an international business and investment centre. The geographical location of Cyprus is ideal for establishing partnerships with business people based in Europe, Africa, Asia, Middle East and other regions. In addition, the well-established infrastructures urge business people to launch their investment projects in Cyprus.

Michael Chambers and Co. LLC is a full service Cyprus law firm offering a wide spectrum of expertise in an impressive variety of legal disciplines. Our philosophy is simple: you give us the facts and we will give you the law, based upon which we will undertake your instructions in an efficient and cost-effective manner. For more information: www.cypruslawfirm.com

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