Aside from certain cases where payments are made to companies in jurisdictions that are included on the EU blacklist, Cyprus does not levy a WHT on dividends, interests, and royalties paid to non-residents of Cyprus. Royalties on rights used within Cyprus are subject to WHT of 10% (5% in the case of cinematograph films). Such Cyprus WHT on royalties for rights used within Cyprus may be reduced or eliminated by DTTs entered into by Cyprus or by the EU Interest and Royalty Directive as transposed into the Cyprus tax legislation.
As of 31 December 2022, Cyprus applies WHT on certain payments to companies in jurisdictions included on the EU list of non-cooperative jurisdictions on tax matters (commonly referred to as the EU ‘blacklist’) as follows:
- WHT of 17% applies on payments of dividends by non-quoted companies.
- WHT of 30% applies on payments of interest (excluding payments by individuals).
- WHT of 10% applies on payments of royalties and similar type payments (excluding payments by individuals).
WHT on other types of income
Cyprus levies a 10% WHT on the remuneration of non-Cyprus tax residents for technical services derived from sources in Cyprus, subject to certain conditions. No such WHT is levied if such services are performed via a PE in Cyprus or between ‘associated’ companies as defined by the EU Interest and Royalty Directive as enacted into the Cyprus tax legislation.
Cyprus also levies a 10% WHT on the gross income/receipts derived from the exercise in Cyprus by a non-resident individual of any profession or vocation and the remuneration of non-resident public entertainers (e.g. theatrical, musical, football clubs, other athletic missions).
Further, a 5% WHT is levied on gross income derived from within Cyprus by non-residents with no local PE for services in regards to the exploration, extraction, or exploitation of the continental shelf, as well as the establishment and use of pipelines and other installations on the ground, on the seabed, and on the surface of the sea.
WHT on dividend, interest, and royalties table
In the table below, we illustrate the applicable Cyprus WHT rates outbound for dividend, interest, and royalty payments.
|Dividends||Interest||Royalties rights not used within Cyprus||Royalties rights used within Cyprus|
|0 (1)||0 (1)||0 (1)||5/10 (2)|
EU non-cooperative jurisdictions
|Bosnia (7)||0||0||0||5/10 (5)|
|Canada||0||0||0||0/5/10 (4, 5)|
|China, People’s Republic of||0||0||0||5/10 (5)|
|Czech Republic||0||0||0||0/10 (11)|
|Ireland, Republic of||0||0||0||0/5 (5)|
|Jordan (14)||0||0||0||5/7 (15)|
|Montenegro (7)||0||0||0||5/10 (5)|
|Saudi Arabia||0||0||0||5/8 (13)|
|Serbia (7)||0||0||0||5/10 (5)|
|Slovak Republic (9)||0||0||0||0/5 (10)|
|United Arab Emirates||0||0||0||0|
- Under Cyprus legislation, there is no WHT on dividends and interest paid to non residents of Cyprus. Further, there is also no WHT on royalties paid to non-residents of Cyprus for rights not used within Cyprus.
- Royalties earned on rights used within Cyprus are subject to WHT of 10% (except royalties relating to cinematographic films, where the WHT rate is 5%).
- A WHT rate of 5% is applicable on cinematographic films, including films and videotape for television.
- 0% on literary, dramatic, musical, or artistic work (excluding motion picture films and works on film or videotape for use in connection with television).
- The WHT rate of 5% is applicable on cinematographic film royalties.
- 5% WHT applies for any copyright of literary, dramatic, musical, artistic, or scientific work.
- Bosnia, Montenegro, and Serbia apply the Yugoslavia/Cyprus treaty.
- A 5% WHT rate will be levied on payment of royalties in respect of any copyright of scientific work, any patent, trademark, secret formula, process, or information concerning industrial, commercial, or scientific experience and cinematographic films.
- The Cyprus-Czechoslovakia treaty applies with the Slovak Republic.
- 5% WHT rate applies for patents, trademarks, designs or models, plans, secret formulas, or processes, or any industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
- 10% WHT rate applies for patent, trademark, design, or model, plan, secret formula or process, computer software or industrial, commercial, or scientific equipment, or for information concerning industrial commercial, or scientific experience.
- 0% WHT rate applies if the payer is a company that is a resident in Cyprus and the beneficial owner of the income is a company (other than partnership) that is a resident in Latvia. 5% WHT rate applies for all other cases.
- 5% WHT rate applies in the cases of royalty payments for the use of, or the right to use, industrial, commercial, or scientific equipment. 8% WHT rate applies for all other cases.
- The treaty is effective as of 1 January 2023.
- A WHT rate of 7% is applicable on royalties and fees for technical services. A WHT rate of 5% is applicable on royalties for cinematographic films, including films and video tape for television.
- The Cyprus-Netherlands treaty has entered into force as of 30 June 2023.