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Cyprus and Kazakhstan signed a Convention for the Avoidance of Double Taxations

Republic of Cyprus and Kazakhstan have signed a Convention for the Avoidance of the Double Taxation (DTA) and for the prevention of the Tax Evasion.

The Convention was signed in Nursultan, in Kazakhstan between the Cypriot Minister of Foreign Affairs and the Kazakh First Deputy Prime Minister, Finance Minister.

The agreement’s main scope is to enhance the economic and trade ties between the two countries, as well as to provide better protection to the residents on both countries.

Kazakhstan levies withholding taxes at the rate of 15% on dividends, interest and royalties. This rate could be reduce by the provisions of DTT between the countries.

Dividends

  • 5% WHT if the beneficial owner is a company which holds directly at least 10% of the capital of the company paying the dividends and 15% WHT in all other cases.
 
Interest

  • 10% WHT on interest payments, provided that the recipient is the beneficial owner of such interest. Returns on WHT If the beneficial owner of the interest is the Government of one of the two countries, a political subdivision, a central or local authority, the Central Bank or any other financial institution wholly owned by the Government of the other Contracting State.
 
Royalties

  • 10% WHT on royalty payments, provided that the recipient is the beneficial owner of such royalties.
 
The new Convention is based on the OECD’s Model Convention for the Avoidance of Double Taxation on Income and on Capital and it will enter in force once both countries confirm that their formal ratification procedures have been completed.

According to the Finance Ministry’s data, with this new addition, the Double Taxation Agreements signed between Cyprus and other countries increases to 65.

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