New agreements in the double taxation agreement collection

23.08.2013

The appearance of two new tax treaties for the avoidance of double taxation is a reflection of the fact that there is an approximation of September and the beginning of the new work year.

Thus, the site of the Ministry of Finance of Australia published the new tax treaty, signed on the 30 day of July between, respectively, Australia and Switzerland. This treaty met all OECD standards. In accordance with this agreement the following rates were established:

- Withholding tax on dividends - 15%, and if the parent company owns more than 10% of the share capital - 5%

- Withholding tax on interest - 10%

- Withholding tax on royalty - 5%.

Another tax treaty, which entered into force recently (August 16), was signed between Cyprus and Portugal. Here, the interest rate on all of the above taxes will be 10%. In case of transfer of income from Cyprus, interest and withholding tax on dividends will not be charged. It is important to note that the agreement will be applied from 2014.

Based on:

http://www.treasury.gov.au/Policy-Topics/Taxation/Tax-Treaties/HTML/Income-Tax-Treaties/Recently-Revised

www.neocleous.com

Expert’s opinion

Current realities dictate their rights: the signed agreement on avoidance of double taxation can legally optimize costs and significantly reduce the tax rates.

The tax reality becomes stronger in the world today. Competent and professional consultants will always help in building a working schemes in accordance with the business aims and in structuring your investments.

Already, there is no need to think how not to pay tax twice, withholding tax or a tax on outgoing dividends. Although the banking system of Cyprus has not in the best conditions now, the signed treaties will bring only advantages and increase the attractiveness of the country.

Irina Lomakina ( Director of Moscow office of “Honest&Bright” Company)