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.

Dividends

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%.

Interest

There is no withholding tax on interest, as long as the recipient of the interest is the beneficial owner of the income.

Royalties

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%

Capital gains

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.