In 2009 Cyprus was removed from the Spanish “Black List” of tax havens and now on 14 February 2013 countries signed a Double Tax Treaty, which is a positive development in the trading and investment relationship between the two. In three months the treaty will enter into force with several significant provisions of the treaty as follows:
- Gains from the disposal of immovable property are taxed in the country in which the immovable property is situated.
- Gains from the disposal of shares or comparable interests (other than those listed on the Stock Exchange of either country) deriving more than 50% of their value from immovable property, are taxed in the country in which the immovable property is situated.
- Gains from the disposal of any other type of shares are taxed in the country of which the seller is resident.
- 0% withholding tax applies if the beneficial owner is a company (other than a partnership) holding at least 10% of the capital of the company paying the dividend.
- 5% applies in all other cases.