• Double Tax Treaty (DTT) Cyprus and Kazakhtsan

Double Tax Treaty (DTT) Cyprus and Kazakhtsan

23 August 2019

On the 15th of May 2019, Cyprus signed a tax treaty with Kazakhstan which was published in the Official Cyprus Gazette on 24 May 2019.

On the 15th of May 2019, Cyprus signed a tax treaty with Kazakhstan which was published in the Official Cyprus Gazette on 24 May 2019. The treaty will enter into force as of 1st of January of the year following the year of finalization of the necessary ratification procedures between the two countries.  
 
The tax treaty is based on the OECD Model provisions and it provides for the following withholding tax (WHT) on dividends, interest and royalty payments:
 

Dividends
 
•    5% WHT if the beneficial owner is a company which holds directly at least 10% of the capital of the company paying the dividends.
 
•    15% WHT in all other cases.
 
Interest
 
•    10% WHT on interest payments, provided that the recipient is the beneficial owner of such interest.
 
•    0% WHT on interest payments where the beneficial owner of the interest is the Government of the other Contracting State, a political subdivision, a central or local authority, the Central Bank or any other financial institution wholly owned by the Government of the other Contracting State.
 
Royalties
 
•    10% WHT on royalty payments, provided that the recipient is the beneficial owner of such royalties.
 
Capital Gains
 

In relation to capital gains taxation, the DTT provides that gains derived by a resident of a Contracting State from the alienation of shares or similar interests in the capital of a company deriving more than 50% of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other Contracting State. This does not apply to gains derived from alienation of shares listed on an approved Stock Exchange.