Cyprus and France
have concluded a double tax treaty
in 1981, with the purpose of avoiding double taxation and fiscal evasion. This double tax treaty
regulates the income
and capital taxation in both jurisdictions and applies to Cypriot and French residents.
Taxes covered by the Cyprus – France double tax treaty - listed by our experts in company formation in Cyprus
The taxes covered by the Cyprus – France double tax treaty are as mentioned below:
1. In France:
a. Income tax;
b. Corporate tax.
2. In Cyprus:
a. Income taxation.
The tax agreement
between the two countries also applies to any similar taxes which are due after the date the treaty was signed. Our Cypriot company formation advisors
can offer more details regarding what these taxes may consist of.
Business profit taxation according to the Cyprus – France double tax treaty
According to the tax agreement between Cyprus and France, business profits are taxed as follows:
The profits of a company acting in one jurisdiction will be taxed only in that particular country, except if it also activates in the other contracting jurisdiction through a permanent legal entity. Our company formation experts in Cyprus
can provide further information on this matter;
• If a company in one of the jurisdictions undertakes activities in the other one through a permanent legal entity, the profits of that company are distributed to the permanent legal entity;
• When establishing the profits of the permanent legal entity, there are allowed certain deduction expenses, comprising of executive and administrative expenses which may be from the country where the permanent legal entity is located or abroad;
Tax rate deductions under the Cyprus – France double tax treaty
Under the above-mentioned agreement, the following tax rate deductions are applied:
• Dividend tax: 10%, if the entity receiving the dividends owns minimum 10% of the business which offers the dividends and 15% in all other situations;
• Interests tax rate: 10%;
• Royalty payment tax: maximum 5%.