According to an official interpretation dated March 31, 2016 (DOS A 1051902 EX 2016) by the Directorate of International Economic Relations (DOS) of Greece regarding the double taxation avoidance treaty (DTA) between Greece and Cyprus, the Cypriot income tax (12.5%) can be credited against the Greek dividend tax (5%).
According to the DOS interpretation of the dividend taxation provisions of the DTA, to calculate the Greek tax to be imposed on an ordinary dividend paid by a Cypriot company to a Greek shareholder, a credit must be granted for the withholding tax paid in Cyprus (0%) as well as for the income tax paid by the Cypriot company on its taxable profits, which amounts to 12.5%. As a result, the additional tax to be imposed in Greece on dividends from Cypriot companies is limited to 0%.
Based on the above interpretation by the DOS, Cypriot companies gain a significant comparative advantage over companies from other countries.
It should be noted that this interpretation offers no advantage if proper tax planning is not carried out.
Our services are always provided within the framework of legality and confidentiality, with responsibility and respect for commercial law and European tax legislation, without requiring your presence in Cyprus.
Our company undertakes your accounting support in Cyprus, even if you have had your company established by another firm and do not have a smooth collaboration for your accounting support, provided we first thoroughly check your company and there are no issues with it.
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The information contained in this article in no way constitutes a means of pressure and incitement to anyone for the purpose of avoiding individual laws per state and avoiding sound tax policy. They are only advisory texts – articles for their information. The author expressly disclaims all responsibility towards any person, entity, or company acting or not acting in accordance with all or part of the content of this text. Therefore, one should not act or rely on the subject matter or information without first seeking advice from appropriate and competent individuals – professionals regarding their activity and general entity.
