Finland and Cyprus signed an agreement on 15 November 2012 in Nicosia for the avoidance of double taxation, with both sides pointing out its significance for facilitating investments and strengthening bilateral ties.
The agreement generally follows the terms of the OECD Model Tax Convention. The agreement provides for a maximum withholding tax rate of 15% on dividends, reduced to 5% where the recipient is a company controlling 10% of the voting power in the company paying the dividend. Interest and royalties are to be taxable only in the state of residence of the beneficial owner.The agreement is expected to be approved by the respective parliaments in the course of 2013 and should come into force at the beginning of the year 2014.
