Cyprus Double tax treaties

CYPRUS - Double tax treaties with 34 countries
Treaty with Romania

The treaty concluded between Cyprus and Romania applies in the case of Cyprus IBCs (offshore companies) with no restrictions.

The treaty provides:

elimination of double taxation in Romania by way of tax credit
there are reduced withholding taxes for dividends, interest and royalties
there are tax sparing provisions in Romania 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 Romanian companies are taxed in Cyprus only

Example - Royalties from Romania using a Cyprus IBCs (offshore company) in comparison with a non-treaty country

The following example compares the tax position of a company receiving royalties from Romania, using Cyprus, with the case of receiving royalties directly, in the absence of a double tax treaty with Romania.

	Using Cyprus	Directly
Royalties	10,000	10,000
Withholding tax	(500)	(1,500)
Net Royalties	9,500	8,500

- No further tax in Cyprus because of the tax credit for the Romanian tax against the Cypriot tax of 10%, thus there is a tax saving of 10%