On 24 February 2014, Cyprus signed and ratified a bilateral Agreement for the avoidance of double taxation with Norway, which replaces the old Treaty between Norway and the UK that had been extended to Cyprus. The provisions of the new Treaty generally apply from 1 January 2015. The Agreement will enhance the development of trade and economic relations between Cyprus, Norway and other countries.
Pursuant to this Double Tax Treaty, dividend payments will not be subject to withholding tax provided that the recipient is a company which is the beneficial owner of the dividends and has a minimum direct holding of 10% of the capital of the company paying the dividends. The Treaty also provides for no withholding tax on interest and royalty payments. Finally, the Treaty has provisions on the taxation of capital gains from the sale of shares.
The updating and expansion of the existing network of Double Tax Treaties is of high economic and political importance, and aims at promoting Cyprus as an international business centre by attracting foreign investment.