| CYPRUS - Double tax treaties with 34 countries
Treaty with Poland
Russia | Poland
| Romania | Hungary
| Ireland | Greece
| Czech Rep | India
| Sweden
The treaty concluded between Cyprus and Poland applies in the case
of Cyprus
IBCs (offshore)
with no restrictions.
The treaty provides:
- elimination of double taxation in Poland by way of exemption
- directors' fees paid to Polish residents by a Cypriot
- company will not be taxed in Poland
- salaries of Polish employees working in Cyprus will be exempt
from Polish taxation
- the profits of a permanent establishment in Cyprus of a Polish
company which is managed and controlled from Cyprus are exempt
from Polish taxes
- there are reduced withholding taxes for dividends, interest
and royalties
- there are tax sparing provisions in Poland for tax not imposed
by Cyprus, because of tax incentives in Cyprus (10% for dividends
and interest)
- capital gains from the sale of shares in Polish companies are
taxed in Cyprus only
Example 1 - Permanent establishment in Cyprus of a Polish
Company
The following example compares the tax position of a Polish subsidiary
operating through Cyprus, with one operating in Poland.
| |
Using Cyprus |
Directly |
| Profits of Polish entity before tax |
100,000 |
100,000 |
| Taxation |
(10,000) |
(34,000) |
| Profits after tax |
90,000 |
66,000 |
| Profits transferred to Polish head office |
nil |
nil |
| Cyprus profit tax |
10,000 |
- |
Polish tax on profits
|
- |
34,000 |
|
|
