The Cyprus Ministry of Finance has announced that Cyprus has entered

into a double tax agreement with Saudi Arabia for the avoidance of double

taxation (‘DTT’), which aims to prevent tax evasion.

The Cyprus Ministry of Finance has announced that

Cyprus has entered into a double tax agreement with Saudi Arabia for the

avoidance of double taxation (‘DTT’), which aims to prevent tax evasion. The

DTT was signed on January 3, 2018, in Riyadh during an official visit of the

President of Cyprus there and is expected to be ratified and come into force as

from 1 January 2019.

The agreement is based on the OECD Model Convention

for the Avoidance of Double Taxation on Income and on Capital, and provides for

the exchange of financial and other information. This new DTT contains some

modifications and applies to taxes on income as well as on gains from

alienation of movable or immovable property. In the case of Saudi Arabia, the

treaty covers the Zakat and the income tax (including the natural gas

investment tax), whereas, in the case of Cyprus, it covers corporate and

personal income tax, defense tax and capital gains tax.

The Ministry of Finance of Cyprus has further stated

that this DTT is expected to contribute to the developing economic relationship

between the two countries and enhance co-operation in tax matters. Upgrading

and expanding the island's network of double tax agreements is critical to

strengthening Cyprus as an international business centre.