TAX TREATY BETWEEN CYPRUS & PORTUGAL
A Tax Treaty (DTT) for the avoidance of double taxation has been signed between Cyprus and Portugal on the 19th of November 2012. The Tax Treaty is based on the OECD Model and will enter into effect on the 1st of January following the ratification date and the exchange of ratification notifications between the contracting states. Due to this development, Cyprus has been removed from the Portuguese so called "Black List", which includes countries with privileged tax systems.
The most important provisions of the DTT are as follows:
- Withholding tax rate on dividend, interest and royalties is 10%. However, these rates can be reduced to 0% while enforcing the relevant EU directives.
- Sale of Shares in Companies owning immovable property, may by taxed in which the immovable property is situated.