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Cyprus-Kazakhstan double tax treaty enters into force
Cyprus-Kazakhstan double tax treaty enters into force
On January 17, 2020, the Cyprus-Kazakhstan Double Taxation Treaty (hereinafter referred to as the Agreement) entered into force. Its provisions will apply from January 1, 2021. This is preceded by a vote for the approval of the Treaty by the Kazakh parliament and its further ratification by the President of Kazakhstan. Cyprus ratified the Treaty on May 24, 2019. Thanks to this Agreement, Cyprus has further expanded its contractual network and strengthened its position as an investment center for the Eurasian region.
The agreement provides for withholding taxes on dividends:
- There is a 5% withholding tax if the beneficial owner is a company (other than a partnership) that directly owns at least 10% of the capital of a company paying dividends.
- Withholding tax is 15% in all other cases.
The agreement provides for the deduction of 10% interest tax, provided that the recipient is the beneficial owner of such interest.
Withholding tax shall not apply to interest payments if the beneficial owner of the interest is the government of the other Contracting State, a political unit, central or local government, the Central Bank or any other financial institution wholly owned by the government of the other Contracting State.
The agreement provides for the deduction of a 10% royalty tax on the condition that the recipient is the beneficial owner of such royalties.
According to the Agreement, income derived by a resident of a Contracting State from the alienation of shares or comparable shares in the capital of a company receiving more than 50% of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in the other Contracting State.
The foregoing does not apply to income derived from the disposal of shares listed on an approved stock exchange.