Double Tax Treaty between Cyprus and Ethiopia – details

Published 25 January 2016

As last reported on 30 December 2015 a Double Tax Treaty (DTT) between Cyprus and Ethiopia has been signed.

The treaty is based on the OECD Model Convention.

The most important provisions of the DTT are as follows:

Permanent establishment

A building site, construction or installation project constitute a ‘permanent establishment’ only if they last for more than six months.

Dividends

5% withholding tax, if the recipient is the beneficial owner of the dividends.

Interest

5% withholding tax, if the recipient is the beneficial owner of the interest.

Royalties

5% withholding tax, if the recipient is the beneficial owner of the royalties.

It is reminded that under local legislation there is not Withholding Tax for payments of dividends, interests and royalties to non-residents of Cyprus.

The DTT will enter into force once both countries have exchanged notifications that their formal ratification procedures have been completed.