Bilateral Tax Treaty Between Cyprus and Jordan has Entered Into Force
As the leading bespoke corporate services provider in Cyprus, Equation Corporate Services is always tuned into the latest news, legislations, and updates in the financial and business sectors on the island. And sharing this expertise and on-the-ground local knowledge is a big part of what we do here at Equation.
Thus, on 11 April 2022, the first ever concluded Double Tax Treaty between Cyprus and Jordan entered into force. Known as the Cyprus - Jordan Income Tax Treaty (2021), the Treaty will generally apply from 1 January 2023, for withholding taxes and other taxes.
Signed in December 2021, the Treaty is based on both the OECD Model Tax Convention on Income and Capital and the United Nations Model Double Taxation Convention. It also incorporates the so-called ‘base erosion and profit shifting’ (BEPS) minimum standards.
The maximum rates of withholding tax in the Treaty are as follows:
- 7% on royalties (tax at this rate may only be levied on royalties or fees for technical services: in other cases, a withholding tax exemption for royalty payments between the two Contracting States may apply)
- 5% on interest
- 10% on dividends (a 5% rate may apply in case of a company resident in one Contracting State holding at least 10% of the capital of a company resident in the other Contracting State)
Additional news regarding the financial sector in Cyprus can be found on the Ministry of Finance’s press portal. However, if you think this news may impact your business, or you would like information on how corporate services can help your business thrive, feel free to get in touch. Send a message to firstname.lastname@example.org and we’ll make sure to get back to you within 24 hours.