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Amendments on the Convention for the Avoidance of Double taxation between Cyprus and Swiss Federatio

A Protocol updating the Double tax treaty between Cyprus and Switzerland has been signed on 20th of July 2020, in an effort to further develop the economic relationship of the two States as well as to enhance their cooperation on tax matters. The agreement, as with the bulk of Cyprus’ double tax treaties is based on the OECD Model Convention for the Avoidance of Double Taxation on Income and on Capital.

The main amendments as published in the Official Gazette on 24 of July 2020, are the following:

1. Business profits:

A Contracting State shall make no adjustment to the profits that are attributable to a permanent establishment of an enterprise of one of the Contracting States after 6 years from the end of the taxable year in which the profits would have been attributable to the permanent establishment.

2. Associated Enterprises:

Regarding the Associated enterprises, where a Contracting State taxes the profits of an enterprise based in its territory, on which an enterprise in the other contracting state has also been taxed, the profits taxed under the current Convention will be those which would have accrued to the enterprise based on the first State, if some conditions met, the other state will adjust the amount of tax charged on said profits.

3. Mutual Agreement procedure:

Another significant amendment, is the opportunity provided to a person, where he considers that the actions of the Contracting States result or will result for him in taxation not in accordance with the Convention, to present his case to the competent authority of either Contracting State.

4. Entitlement to benefits:

Furthermore, a new article has been introduced providing that a benefit under this Convention shall not be granted if is concluded that obtaining that benefit was one of the main purposes of any arrangement or transaction that resulted directly or indirectly in that benefit. However, the case where, the benefit granted is in accordance with the object and purpose of the Convention, is excluded.

5. Entry into effect:

With regard to the enforcement of the Protocol, each of the two States shall notify to the other the completion of the procedures required by its law and by the time of the last notification, the Protocol shall enter into force and shall thereupon have effect:

  • In respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year following the date on which the Protocol enters into force.

  • In respect of other taxes, for taxation years beginning on or after the first day of January of the year next following the date in which the Protocol enters into force.

Notwithstanding the above, the amendments presented at the points 1, 2 3 and 4 of the current article are effective from the date of entry into force of this Protocol.

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The content of this article is intended to provide general information on the subject matter and does not constitute legal advice. For any further information or assistance, please contact Marilou Pavlou by email at or by phone at +357 22552727.

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