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📢DOUBLE TAX TREATY BETWEEN CYPRUS AND OMAN

Writer's picture: PCV LLCPCV LLC

Updated: Jan 13

A new agreement for the avoidance of double taxation between Cyprus and Oman was formalised on the 8th of December 2024, and subsequently published in the Official Gazette on the 13th of December 2024.


The provisions of this Agreement will come into force on the 1st of January 2025 following the completion of the ratification process by both nations.


The Agreement aligns with the most recent OECD Model Convention for the avoidance of double taxation and incorporates all the key standards outlined in the Base Erosion and Profit Shifting (BEPS) action plan.


These include measures such as the exchange of information, a mutual agreement procedure, and the principal purpose test.


The agreed withholding tax rates under the Treaty are as follows:


  • Dividends: 0%

  • Interest: 0%

  • Royalties: 8%


It should be noted that under Cyprus’ domestic tax laws, no withholding tax applies to payments of dividends or interest made to individuals or entities that are not Cyprus residents, irrespective of the provisions of any double tax treaty agreements. Additionally, royalties sourced from outside Cyprus are exempt from withholding tax.


Another noteworthy aspect of the Double Tax Treaty is that profits derived by a resident of one country from the sale of shares in entities that derive more than 50% of their value from immovable property located in the other country will be taxed exclusively in the country where the seller is a tax resident.


This Agreement is expected to further deepen the economic and commercial ties between Cyprus and Oman and promote enhanced collaboration on tax-related matters.

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