On 15th October 2015, the Double Tax Treaty between the Republic of Cyprus and Swiss Confederation had entered into force (the "Treaty").
The said Treaty is based on the OECD Model Convention on the Avoidance of Double Taxation on Income and on Capital.
Under the Treaty, there is no withholding tax on interest and royalties.
The following withholding tax rates apply on dividends:
0% if the beneficial owner of the dividend is (i) a company (the term does not include partnerships) whose capital is wholly or partly divided into shares holding directly at least 10% of the capital of the company paying the dividend for an uninterrupted period of at least one year (the time period criterion may be satisfied post the date of the dividend payment), or (ii) a pension fund or other similar institution recognized as such for tax purposes, or (iii) a Government, a political subdivision, local authority or central bank of one of the two contracting states and in all other cases 15% apply.
Irrespective of the above there are no withholding tax on dividend payments made out of Cyprus.
Under the Treaty, Cyprus retains the exclusive taxing right on disposals of shares in Swiss companies, except in certain cases, when the disposed-of shares derive more than 50% of their value directly or indirectly from immovable property situated in Switzerland.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.