On 28 April 2013, the double tax agreement that was signed on 15 October 2012 between Cyprus and Finland will enter into force. The treaty generally follows the provisions of the OECD Model. Under the treaty the maximum withholding tax rate on dividends is 15%, reduced to 5% where the recipient of the dividends direct controls 10% of the voting power of the company paying the dividend. Interest and royalties are taxable only in the state of residence of the recipient.
The treaty generally applies from 1 January 2014. The terms of the new double tax treaty are expected to allow for transparency and mutually beneficial business relations between both countries.
