The Protocol for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital was signed today February 19, 2021 in Nicosia between the Government of the Republic of Cyprus and the Federal Republic of Germany. On behalf of the Republic of Cyprus, the protocol was signed by the Minister of Finance, Mr. Constantinos Petrides and on behalf of the Federal Republic of Germany, the Protocol was signed by the Ambassador of Germany to Cyprus Honorable Mr. Franz Josef Kremp.
According to a statement, the signed Protocol introduces, among others, the minimum standards of the Base Erosion and Profit Shifting (BEPS) actions of the Organization for Economic Co-operation and Development, related to bilateral agreements and other amendments that have been bilaterally agreed upon.
Since the Double Taxation Convention with the German Federation has not been covered by the Multilateral Convention, the aim of which was to introduce automatically and expedite BEPS Actions, the main amendments in the protocol include the incorporation of specific wording in the Preamble of the Convention and the amendment of the relevant entitlement to benefits article ‘Application of the Agreement in Special Cases’ Article. In addition, specific wording was introduced in the ‘Business profits’ Article.
Upgrading and expanding the network of Double Taxation Conventions, is of high economic and political importance and aims to further strengthening and attracting investments by promoting Cyprus as an international business center.