By Nexora Cyprus editorial team · General information — seek advice for your circumstances
The DTA framework
Cyprus's DTA network has been a key competitive advantage since the 1970s: 65+ active treaties, mostly OECD-MTC-aligned, mostly post-MLI (Multilateral Instrument) updated. Cyprus does not levy outbound WHT on dividends (0% domestic to any country), so DTAs are typically used for SOURCE-state WHT reductions on inbound flows.
Post-Brexit, the Cyprus-UK DTT remains the primary tax framework between the two countries. Key headline rates (assuming substance + PPT compliance):
The Cyprus-US DTA dates from 1985 and includes a Limitation on Benefits (LOB) clause designed to prevent third-country residents from accessing the treaty by routing through Cyprus. Practical headline rates:
The 2016 India-Cyprus protocol restored Cyprus to favourable treaty status (after a 2013 'non-cooperative' designation). Now widely used for India-inbound investments via Cyprus holding companies.
The BEPS MLI (signed 7 June 2017, in force in Cyprus from 1 May 2020) overlays a Principal Purpose Test (PPT) on nearly all of Cyprus's DTAs. Under PPT, treaty benefits are denied if 'obtaining the benefit was one of the principal purposes' of any arrangement. Substance + commercial purpose documentation is the defence.
Several treaties also have explicit LOB clauses (most notably US, Singapore) layered on top of PPT.
Cyprus Tax Department documents and Cyprus Tax Reform 2026 material publish the controlling material for this topic. Check the current law, form, circular or portal instructions before acting; this article is general information and the live official material prevails.
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Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently. Consult a qualified Cyprus adviser for guidance specific to your situation. The information on this page is general guidance only and does not constitute legal, tax, accounting, immigration or financial advice. Specific advice should be obtained based on the facts of each case.
— References linked in this article
Read each reference alongside the claim it accompanies and check current amendments before relying on it. General information — seek advice for your circumstances.
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