Cyprus-Germany Double Tax Treaty: Key Benefits & Overview The Double Tax Treaty (DTT) between Cyprus and Germany is designed to eliminate double taxation and promote cross-border investments between the two countries. It provides clarity on taxation rules for individuals and businesses operating in both jurisdictions. Key Tax Benefits Under the Treaty

Dividends: 5% withholding tax if the recipient holds at least 10% of the paying company’s capital. 15% withholding tax in all other cases.

Interest: 0% withholding tax, meaning interest payments from Germany to Cyprus (and vice versa) are tax-free at the source.

Royalties: 0% withholding tax, allowing royalty payments to flow freely without deductions.

 Capital Gains Tax: Gains from the sale of shares (except for real estate-rich companies) are taxed only in the seller’s country of residence, making Cyprus an attractive jurisdiction for capital gains.

 Permanent Establishment (PE) Rules: A business will create a taxable presence in the other country only if it has a PE, generally requiring a fixed place of business or a long-term project (over 6 months). Why Is This Treaty Important? The Cyprus-Germany DTT enhances tax efficiency for businesses, investors, and expatriates. With low withholding tax rates, no tax on interest and royalties, and favorable capital gains treatment, Cyprus remains a strategic hub for companies engaging with Germany. For businesses and investors seeking tax-efficient structures, Cyprus continues to be one of the most favorable jurisdictions in Europe under this treaty.