The Income Tax Treaty between Cyprus and Spain entered into force on 28 May 2014 and its provisions will come into effect on 1 January 2015.

Under the treaty, the following withholding taxes will apply:

Dividends:

  • 0% if the beneficial owner is a company (other than a partnership) which holds at least 10% of the capital of the company paying the dividend.
  • 5% in all other cases.

Interest:

  • 0% withholding tax on interest.

Royalties:

  • 0% withholding tax on royalties.

Capital Gains:

  • Gains from the disposal of immovable property are taxed in the country where the immovable property is situated.
  • Gains from the disposal of shares or comparable interests not listed on the Stock Exchange of either country (deriving more than 50% of their value from immovable property), are taxed in the country in which the immovable property is situated.
  • Gains from the disposal of any other type of shares are taxed in the country of which the seller is resident.