Last week saw Cyprus add The Netherlands to the long list of countries with which it has signed double taxation agreements. The signing took place in The Hague and was the culmination of an extensive period of negotiations. The agreement represents an important milestone on Cyprus’ journey to be recognized as a bone fide low taxation international financial centre. Cyprus now has double taxation treaties with all EU member states except Croatia.
The text of the agreement with The Netherlands has not yet been published but is likely to follow the OECD Model Tax Convention. Double taxation treaties aim at ensuring fair taxation of both physical persons and legal entities by ensuring that the same income stream is not taxed twice. In addition they promote economic cooperation and information exchange between states. The double taxation treaty between the Netherlands and Cyprus is the 66th double tax treaty of Cyprus. Similar agreements are currently being negotiated with Hong Kong, Nigeria, Pakistan and Jordan.