DTT between Cyprus and Kazakhstan has been signed

A Double Tax Treaty between Cyprus and Kazakhstan has been signed and ratified by Cyprus on the 15th of May 2019. Subject to the finalisation of the various legal procedures involved, the DTT is expected to enter into effect from 1 January 2020.

Dividends:
The DTT provides for 5% withholding tax (WHT) on dividends provided that the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 10% of the capital of the payer company. In other cases a 15% WHT applies on dividends (Cyprus does not levy any WHT on dividend payments under domestic tax law).

Interest:
For interest, the DTT provides for a 10% WHT as long as the recipient of the interest is the beneficial owner of the income. (As per the Cyprus tax legislation, no Cyprus WHT applies on interest payments to non-Cyprus tax residents).

Royalties:
For royalties, the DTT provides for 10% WHT on royalty payments, provided that the recipient is the beneficial owner of such royalty (As per the Cyprus tax legislation, no Cyprus WHT applies on royalty payments to non-Cyprus tax residents – except in the case of royalty payments earned on rights used within Cyprus).

Capital Gains:
For capital gains, Cyprus retains the exclusive taxing rights on disposals of shares made by Cyprus tax residents, with the exception of the following cases:

• non-listed shares which derive more than 50% of their value, directly or indirectly, from immovable property situated in Kazakhstan, and,
• shares which derive the greater part of their value from certain offshore rights and/or movable property relating to exploration or exploitation of the seabed or subsoil or their natural resources located in Kazakhstan.

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