Cyprus Keen To Increase Stock Of Double Tax Treaties

by Lorys Charalambous, Tax-news.com, Cyprus

11 May 2001

According to reports from the Cypriot media, Finance Minister Takis Clerides has announced that the government intends to enter into double tax treaty agreements with a number of other countries.

Currently Cyprus is carrying on negotiations with four countries: Iran, Seychelles, Lebanon and Armenia. Talks with Indonesia have come to a conclusion and it is expected that the two countries will sign a treaty in the very near future. The country already has double tax treaties with more than thirty other countries, amongst which emerging markets are strongly represented.

Apparently the government wishes to sign as many double tax treaties as is possible with other countries. As the department responsible for the double tax agreements, the Finance Ministry has said that it is particularly interested in negotiating with other countries that are considered 'tax havens' with low-tax regimes.

The drive to enter into so many double tax treaties comes under the OECD's framework of commitment that Cyprus has complied with in order to secure its removal from the multilateral agency's blacklist of 'harmful tax havens.' During a speech at the Annual General Meeting of the Cyprus International Business Association last month, Mr Clerides said: 'In making their commitment to the OECD, the Cyprus authorities took into account the commitments by the OECD member countries themselves to eliminate harmful tax practices by April 2003. The implication of this condition for Cyprus, is that the content and pace of the programme to eliminate harmful tax practices should not be any more severe nor proceed faster than the action taken by the majority of OECD members themselves to eliminate harmful tax practices.'

He added: 'Our strategic vision is to strengthen and continuously upgrade the role of Cyprus as a centre of excellence for export oriented reputable international businesses, engaged in the production of high quality services. In addition, we will continue to expand our network of International Treaties for the Avoidance of Double Taxation and continue to improve the infrastructure of our economy in the globalised marketplace.'

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