Gold Magazine September - October 2013, Issue 30 | Página 57

E

“are not alone seeking preferential deals” with
African countries to channel FDI, with South
Africa and Botswana trying to play a similar
role locally.
Angelos Gregoriades told Gold that, given
the interest expressed lately in the countries
of Sub-Saharan Africa, perhaps a targeted
effort to conclude Double Taxation Agreements with those countries may prove to be
of benefit to Cyprus. “Especially considering
the exploitation of our own natural resources
and seeing that energy resources are something
we have in common, an IPPA may encourage
the development of business relations in that
sector. Similar considerations should be made
for countries in the Latin America region such
as Brazil,” he said.
In the case of Cyprus, there are specific
existing tax treaties that need to be renegotiated such as those with the USA and China. It
should also be noted that cooperation with the
US authorities will also be enhanced through
the implementation of FATCA (Foreign
Account Tax Compliance Act) regulations.
For this purpose, the Cyprus government
is involved in negotiations with the US Tax
Authorities for the signing of a bilateral agreement.
Gregoriades points out that with regard to
IPPAs, “These need to be concluded so as to
enhance the investment environment. However, prior consultation is now required by the
European Union in this respect.”
But what is the stance of Cyprus as an
attractive jurisdiction in relation to DTAs,
compared with other financial centres like
Luxembourg, the Netherlands, Mauritius and
Singapore? Gregoriades told Gold that a brief
look at other competing jurisdictions shows
that the Netherlands has over 90 Double Tax
Treaties in force, Ireland and Luxembourg
have more than 60, and Switzerland has
more than 100. Mauritius has concluded 47
DTAs whilst, Singapore has 69. Cyprus has
concluded 45 DTAs and efforts are ongoing,
with negotiations currently underway with ten
countries.
In terms of the target countries, South
America and Sub-Saharan Africa may definitely be promising regions, Gregoriades says.
“It is interesting that other financial centres
are not yet so active or operative in these areas.
For example, the Double Tax Treaty Network
of Sub-Saharan African countries in general

NOTES

* 7 Denmark - The existing Convention ceased to have effect as from
1.1.2012
** The treaty between Cyprus and the Socialist Federal Republic of
Yugoslavia is still in force.
*** The treaty between Cyprus and the Czechoslovak Socialist Republic
is still in force
**** The treaty between Cyprus and the Union of Soviet Socialist
Republics

I

DOUBLE TAXATION

nternational juridical double taxation,
generally defined as the imposition of
comparable taxes in two or more states on
the same taxpayer in respect of the same
subject matter and for identical periods, has
a harmful effect on the international exchange of
goods and services and cross-border movements
of capital, technology and people. In recognition of the need to remove this obstacle to the
development of economic relations between
countries, as well as of the importance of clarifying
and standardising the fiscal situation of taxpayers
who are engaged in activities in other countries,
the OECD has developed a Model Convention on
Income and on Capital which provides a means to
settle on a uniform basis the most common problems that arise in the field of international juridical
double taxation.

is with high tax jurisdictions such as France
which has concluded over 25 DTAs with
African countries though this may, of course,
be due to historical reasons.”
It is noteworthy that Cyprus has only
concluded Double Taxation Agreements with
Egypt and South Africa from the whole of the
African continent and none is with a SubSaharan African country. In contrast, both the
Netherlands and Switzerland have concluded
DTAs with Ghana, Malawi and Zambia,
whilst Switzerland also maintains an active
Double Tax Treaty with Ivory Coast and The

Gambia among others. Singapore has six such
deals, while Seychelles, Luxembourg and the
Netherlands have started negotiations with
governments in Africa. The Cyprus government, Gregoriades says, should consider taking
immediate action on this matter.
But what needs to be done for Cyprus to
upgrade and update its DTAs? In Angelos
Gregoriades’ view, “We should intensify our
negotiation processes with other countries and
become more proactive in expressing an interest in concluding DTAs. It would also be very
useful to put down policy guidelines outlining
our goals and our targets and set a clear path of
our intentions for formulating DTAs. It is very
important to have a Business Plan.”
It is worth noting, however, that the first
step in such cases tends to be political, which
is why the Ministry of Foreign Affairs, in consultation with the Ministry of Finance, should
perhaps be engaged more actively in diplomatic
talks initiating the process of concluding such
tax agreements.
It should also be noted that a wellestablished, dedicated team, consisting of
professionals from the Ministry of Finance
and the private sector, has already been
established and is currently handling the
negotiations and technical issues relating to
Double Tax Agreements.

CYPRUS TAX TREATY PARTNERS
STATE

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

AJIKISTAN****
ARMENIA
AUSTRIA (NEW ΑGREEMENT)
AZERBAIJAN****
BULGARIA
BELARUS
BELGIUM
CANADA
CHINA
CZECH REPUBLIC
(NEW AGREEMENT)
DENMARK*
TREATY
NOTES
NEW AGREEMENT
ESTONIA
EGYPT
FINLAND
FRANCE
GERMANY
(ΝEW AGREEMENT)
GREECE
HUNGARY
INDIA
IRELAND
ITALY
TREATY
PROTOCOL
(ADDITIONAL PROTOCOL)
KUWAIT (NEW AGREEMENT)
KYRGYZSTAN****
LEBANON

DATE
OF ENTRY
INTO FORCE

1983
2011
1990 (2013)
1983
2001
1999
1999
1985
1991
1980
(2009)
1981
1982
2011
2014
1995
2014
1983
1977
2011
1969
1982
1994
1970

STATE
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

1983

47

1986
1983
2005

48
49
50

MALTA
MAURITIUS
MOLDOVA
MONTENEGRO**
NORWAY
POLAND
(NEW AGREEMENT)
PORTUGAL
QUATAR
ROMANIA
RUSSIA
(AMENDMENT PROTOCOL)
SAN MARINO
SERBIA**
SEYCHELLES
SINGAPORE
SLOVAKIA***
SLOVENIA****
(NEW AGREEMENT)
SOUTH AFRICA
SPAIN
SWEDEN
SYRIA
THAILAND
UKRAINE****
(ΝEW AGREEMENT)
UNITED ARAB EMIRATES
UNITED KINGDOM )QIQd)AI=Q=
=0)UM)Ui -%MQ8