Double Taxation Avoidance Agreement (DTAA) between Cyprus and the Grand Duchy of Luxemburg

The Ministry of Finance announced that on 8 May 2017 in Nicosia, The Republic of Cyprus and The Grand Duchy of Luxemburg concluded and signed the Double Taxation Avoidance Agreement (DTAA). The treaty will come into force as from the 1st January next following the year in which each country completes the ratifications process.

The DTAA is based on the OECD Model Convention and is expected to further improve the business cooperation between Cyprus and Luxemburg. The treaty sign off was well received by the local and foreign business communities and international investors and further enhances Cyprus’ position as an international business center. The DTAA main provisions are analyzed below:


In cases where the beneficial owner of the dividend is a company, which owns at least 10% of the shares of the company paying the dividend, the withholding tax rate is set at 0%.  In all other cases the withholding tax rate is 5%.


The withholding tax rate on interest is set at 0%.


The withholding tax rate on royalties is set at 0%.

Capital Gains

Gains from the disposal of immovable property are taxed in the country where the immovable property is situated.  Capital gains arising from the disposal of shares deriving more than 50% of their value directly or indirectly from immovable property in the other Contracting State may be taxed in that other State.  Other capital gains from the alienation of any other property are taxable only in the place of residence of the alienator.

For more information you may contact:

Reanda Cyprus Limited
48 Archangelou Avenue,
1st Floor, Engomi
CY-2404 Nicosia, Cyprus
Tel.: + 357 22670680

This newsletter has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this newsletter. Reanda Cyprus Limited would be pleased to advise readers on how to apply the principles set out in this newsletter to their specific circumstances. Reanda Cyprus Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this newsletter.