The DTA between Cyprus and Qatar (in place since 2009) is a testament of how countries that operate in the international movement and attraction of investments use their DTA network to achieve efficiencies in tax planning.

The DTA between Cyprus and Qatar provides for zero withholding tax on dividends and interest and a maximum of 5% on royalties. Based on the fact that dividend income is exempted from the calculation of taxable income in Cyprus (with few exceptions) the DTA makes the use of the Cyprus holding company for investments in Qatar the most attractive option.

In addition, Cyprus can take advantage of the DTAs that Qatar has signed with countries which itself has not any DTA agreements, for the tax efficient channeling of investments through Qatar.

The same applies to investments originating from Qatar in countries with which Cyprus has DTAs and Qatar has not. A very good example is Ukraine,with which Cyprus has a highly favorable DTA and Qatar has not. It is evidenced that after the ratification of the Cyprus–Qatar DTA, a significant volume of investments is funneled from Qatar to Ukraine via Cyprus.

In conclusion, the DTA between Cyprus and Qatar is another success story of Cyprus in the market of international investments.

For questions, comments and selection of topics that might interest you please contact the author of the column.

Charilaos Hadjiioannou, BSc, ACA