Global Tax Weekly A Closer Look - March 29, 2018

Introduction

On January 3, 2018, Cyprus and Saudi Arabia signed a new double taxation agreement (DTA), the first between the two countries. The new agreement was published in the Cyprus government gazette on March 5, 2018.¹ Like all of Cyprus's recent DTAs, it closely follows the 2014 OECD Model Tax Convention. It also includes a protocol elaborating the provisions on offshore activities and information exchange. The key features of the DTA and the protocol are summarized below.

Taxes Covered

The agreement applies to taxes on income imposed by either country, including taxes on gains from the alienation of movable or immovable property. In Saudi Arabia these are currently the Zakat (obligatory alms under the Muslim religion) and the income tax including the natural gas investment tax; in Cyprus they are income tax, corporate income tax, special contribution for defense (known as SDC tax), and capital gains tax.