Cyprus signs off a Double Taxation Avoidance Agreement (DTAA) with Saudi Arabia–January 2018

The treaty is based on the OECD Model Tax Convention framework with some modifications. For Saudi Arabia, the treaty covers the Zakat (religious obligation of Muslims) and the income tax (including the natural gas investment tax). For Cyprus, it covers corporate and personal income tax, defence tax and capital gains tax.

Dividends 

The withholding tax rate on dividends is set at 0%, as long as there is at least 25% participation by a tax resident company. In any other case, the withholding tax rate on dividends is set at 5%. 

Interest 

The withholding tax rate on interest is set at 0%, as long as the recipient of the interest is the beneficial owner of the income. 

Royalties 

The withholding tax rate on royalties is set at 5% in relation to royalties paid for the right to use industrial, commercial or scientific equipment. For any other royalties the withholding tax rate is set at 8%, as long as the recipient of the royalties is the beneficial owner of the income. 

Capital gains 

Gains from the sale of shares in companies are taxed in the country where the company is located, as long as the participation is at least 25% of the capital of that company, at any time within twelve months prior to the disposal of shares.

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