The double tax treaty for the avoidance of double taxation between Cyprus and Saudi Arabia was signed on 3 January 2018. The treaty is expected to be ratified and come into force as from 1 January 2019.
Withholding taxes on dividends:
- There is no withholding tax in cases where there is at least 25% participation by a company that is tax resident in the receiving jurisdiction.
- In all other cases the withholding tax is 5%.
There is no withholding tax on interest, as long as the recipient of the interest is the beneficial owner of the income.
Withholding taxes on royalties (as long as the recipient of the royalties is the beneficial owner of the income):
- 5% in cases where the royalties are paid for the use of, or the right to use, industrial, commercial or scientific equipment
- in all other cases the withholding tax is 8%
Gains arising from the disposal of shares of a substantial participation in the capital of a company which is resident of a Contracting State may be taxed in that Contracting State.
A person is considered to have a substantial participation when this participation is at least 25% of the capital of that company, at any time within twelve months prior to the disposal of the shares.