The Government of Jersey has made the text of the Agreement between Jersey and Cyprus for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, which was signed on July 11, 2016, (Hereafter the DTA) available via its website.
Below we will discuss a selection of provisions included in the DTA of which we think they might interest our readers.
Taxes covered
Based on Article 2, Paragraph 3 of the DTA (“Taxes Covered”), the existing taxes to which the DTA shall apply are in particular:
a) in the case of Jersey, income tax;
b) in the case of Cyprus:
(i) the income tax;
(ii) the corporate income tax
(iii) the special contribution for the Defense of the Republic; and
(iv) the capital gains tax.
Article 2, Paragraph 4 subsequently arranges that the DTA shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the DTA in addition to, or in place of, the existing taxes.
Permanent establishment
Article 5, Paragraph 3 of the DTA (“Permanent Establishment”) arranges that a building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.
Article 7, Paragraph 3 of the DTA (“Business Profits”) contains a so-called appropriate adjustment clause that applies in case the profits attributed to a permanent establishment are adjusted by one of the Contracting Parties.
Immovable property
Article 6, Paragraph 1 of the DTA (“Income from Immovable Property”) arranges that income derived by a resident of a Contracting Party from immovable property (including income from agriculture or forestry) situated in the other Contracting Party may be taxed in that other Party.
Associated enterprises
Article 9, Paragraph 2 of the DTA (“Associated Enterprises”) contains a so-called appropriate adjustment clause.
Dividends
Article 10 of the DTA (“Dividends”) arranges that a Source State is not allowed to withhold withholding taxes over dividend distributions made to a resident of the other Contracting Party.
Interest
Article 11 of the DTA (“Interest”) arranges that a Source State is not allowed to withhold withholding taxes over interest payments made to a resident of the other Contracting Party.
Royalties
If the beneficial owner of the royalties is a resident of the other Contracting State, Article 12 of the DTA (“Royalties”) arranges that a Source State is not allowed to withhold withholding taxes over the royalties.
Other
Furthermore the DTA contains provisions regarding Offshore Activities (Article 20), regarding a Mutual Agreement Procedure (Article 24) and regarding the Exchange of Information (Article 25).
Click here to be forwarded to the text of the DTA as available on the website of the Jersey Government.
Are you looking for other DTAs? Then check our section DTAs & TIEAs, a very efficient way to locate numerous DTAs.
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