On the 8th of October 2019 the Republic of Cyprus and the Arab Republic of Egypt signed a new protocol for the Elimination of Taxation with Respect to Taxes on Income and the Prevention of Fiscal Evasion and Avoidance (“Double Tax Agreement”). The news comes from an announcement on the website of the Cyprus Ministry of Finance.
The Cyprus Minister of Foreign Affairs, Mr. Nicos Christodoulides and his Egyptian counterpart Mr. Sameh Shoukry signed the Double Tax Agreement .
The new Double Tax Agreement will update the existing one which was signed on 19/12/1993 and entered into force on 14/3/1995.
Existing Rates of the Cyprus-Egypt Agreement
|Income Received in Cyprus||15%||15%||10%|
|Payments from Cyprus Pay||15%||15%||10%|
OECD Model Tax Convention on Income and on Capital
The Double Tax Agreement is based on the new OECD Model Tax Convention on Income and on Capital and on the UN Model Tax Convention.
The income covered by the agreement relate to:
- Income from immovable property situate in Cyprus or Egypt
- Profits of a permanent establishment situate in Cyprus or Egypt
- Income from activities of entertainers and sportsperson performing in Cyprus or Egypt
- Director’s Fees paid by a company situate in Cyprus or Egypt
- Remuneration from employment arising in each country and paid to the other
- Dividends paid from one country to the other
- Interest paid from one country to the other
- Royalties from Intellectual Property paid from one country to the other
Purpose of Having a new Double Tax Agreement
It is intended that the new Double Tax Treaty Agreement will contribute to further develop the economic relationship and enhance the co-operation in tax matters between the Government of the Republic of Cyprus and the Government of Arab Republic of Egypt.
Upgrading and expanding the network of Double Taxation Conventions, is of high economic and political importance and aims to further strengthen Cyprus as an international and regional business center. Furthermore with the identification of oil & gas reserves in the Levantine Sea and the prospects of cooperation between the areas states it comes as a natural fit.
Intergovermental Agreement Between the Republic of Cyprus and the Arab Republic of Egypt Concerning a Direct Natural Gas Pipeline
On the 12th of April 2019, the Cyprus Parliament ratified with law 3(III)/2019 the intergovernmental agreement concerning a direct natural gas pipeline between the two countries. The agreement relates to the evaluation, development, design, construction, installation, financing, insuring, ownership, operation “Including the transport by any or all of the shipper of Natural Gas through the Pipeline System. Pipeline System on the other hands means the direct submarine natural gas pipeline which is proposed to begin at an entry point in the Cyprus Exclusive Economic Zone and end at one or more entry or connection points to the idju and/or Damietta LNG plants in Egypt and/or to the Egyprian domestic gas supply network.