Cyprus and Guernsey have signed a double tax treaty and a relevant protocol. The Treaty is now subject to ratification by each of the two countries before it comes into effect.
The treaty follows the OECD Model Treaty and specifically incorporates an exchange of information provision in line with Article 26 of the OECD model treaty.
The treaty provisions provide for a zero-rated withholding tax rate with respect of dividends, interest and royalties.
In line with the press release issued by the Ministry of Finance on this matter, the treaty “will contribute to the further development of the trade and financial relations between Cyprus and Guernsey, as well as other countries”, while “the updating, maintenance and expansion of the existing network of double tax treaties, which are of utmost financial and political importance, aims at further strengthening and attracting foreign investment and promoting Cyprus as an international business centre”.m