Cyprus-Denmark Double Taxation Agreement

Details of the new double tax treaty between Cyprus and Denmark have now been released. The new treaty was signed on 11 October 2010 and will take effect when it has been ratified by both countries. Until then the existing 1981 treaty will continue in effect.

Withholding tax rates

The new treaty eliminates withholding tax on dividends where the beneficial owner is a company directly holding at least 10% of the capital of the distributing company for an uninterrupted period of at least 12 months; otherwise the rate is 15% (subject to certain exemptions granted to governmental bodies and qualifying pension funds). The new treaty also eliminates the 10% withholding tax rate on interest applied in the old treaty. The article on royalties continues to provide for a nil rate of withholding tax.