Cyprus Ethiopia Double Tax Treaty

Cyprus Ethiopia Double Tax Treaty :Cyprus continues to expand its double taxation treaty network and this time in the African region. By the end of the year 2015, Cyprus signed a tax treaty with another African country.The treaty has been signed with Ethiopia for the avoidance of double taxation as recently published in the Official Cyprus Government Gazette in January 2016. Ethiopia is the fifth African country that signs a treaty with Cyprus, This shows the Government’s intention for the expansion of the tax treaty network of Cyprus with the African region. The signing of this Treaty is another step by the Cyprus Republic to support the thousands of foreign investors who put their money into the Cyprus economy.

Cyprus Ethiopia Double Tax Treaty :  Main Provisions

 The treaty is based on the O.E.C.D. Model Convention for the Avoidance of Double Taxation between the two countries on Income and on Capital. Below are the main provisions of the agreement in summarized form:

 Dividends:

 Cyprus Ethiopia double tax treaty In the cases where the recipient is the beneficial owner of the dividends in question, then the withholding tax shall not exceed 5% of the gross amount of the dividends.

 Interest:

Cyprus Ethiopia double tax treaty In the cases where the recipient is the beneficial owner of the interest in question, then the withholding tax shall not exceed 5% of the gross amount of the interest.

 Royalties:

 Cyprus Ethiopia double tax treaty :  In the case where the recipient is the beneficial owner of the royalties in question, then the withholding tax shall not exceed 5% of the gross amount of the royalties.

Entry into force and effectiveness

Cyprus Ethiopia double tax treaty : Upon exchange of notifications between the two countries that their formal ratification procedures have been completed, the agreement will be entered into force. The provisions of the agreement will be effective after the agreement enters into force.