Cyprus-Switzerland tax treaty enters into force

A new tax treaty between Cyprus and Switzerland entered into force as of October 15, Cyprus’s Ministry of Finance announced November 2.

The treaty, signed July 25, 2015, provides for a zero rate of withholding tax on interest and royalties. Withholding tax on dividends is reduced to zero if the beneficial owner is a company which owns at least 10 percent of the share capital of the company paying the dividends or is a pension fund or a government entity. In other cases, the withholding rate is 15 percent. Cyprus’s domestic law does not provide for withholding tax on dividends while Switzerland imposes tax at a 35 percent rate, so the treaty will have an effect on dividends paid out of Switzerland only.

The treaty also includes an administrative assistance provision on the exchange of information on request.

For the text of the treaty (in German) see:

• Treaty