Tax treaty between Cyprus and Bahrain enters into force

A tax treaty between Cyprus and Bahrain entered in to force on April 26, Cyprus’s Ministry of Finance has announced.

The treaty, signed March 9, 2015, provides for zero withholding tax on payments of dividends, interest, and royalties.

The treaty further provides that capital gains from the sale of property are taxable only in the country of the seller’s residence except for sales of immovable property or sales attributed to a permanent establishment.

As such, under the treaty, any gains arising from the sale by a Cyprus resident of Bahrani stock can be taxed only in Cyprus, even if the company holds Bahrani real estate.

Cyprus does not currently tax profits from stock sales unless the stock is of a company that holds Cyprus immovable property.

See:

• Treaty

• Ministry of Finance website