Cyprus-France Tax Agreement: Boosting Economic Relations

December 11, 2023, in Nicosia, the Convention for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance, along with its Protocol, was signed between the Republic of Cyprus and the French Republic. Mr. Makis Keravnos, the Minister of Finance of Cyprus, and Mrs. Salina Grenet-Catalano, the Ambassador of France to Cyprus, signed the Convention on behalf of their respective countries.

This newly signed Convention replaces the previous one from December 1981, aligning with the latest international tax standards. It is expected to bolster trade and economic relations between Cyprus and France, ensuring fairness and equity.

The agreement offers tax certainty to companies, organizations, and individuals, providing clear guidelines on the taxation of income and capital gains for both current and prospective investors. Based on the OECD Model Tax Convention on Income (2017 Model), it incorporates the minimum standards of the Base Erosion Profit Shifting (BEPS) project set by the OECD/G20.

Additionally, the new tax agreement between Cyprus and France outlines the following provisions:

• Dividends: 0% tax rate (if holding at least 5% of capital for 365 days) / 15% in general.
• Interests: 0% tax rate.
• Royalties: 5% tax rate.

By expanding and updating its network of Double Taxation Conventions, the government underscores its commitment to promoting Cyprus as a key international business hub, signifying both economic and political significance.

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