Tax credit for foreign tax paid
Any withholding tax suffered abroad on income which is subject to tax in Cyprus will be credited against Cypriot tax payable on such income irrespective of the existence of a double taxation treaty. Certain treaties also provide for double tax relief for underlying taxes suffered in the case of dividend income received by a Cyprus tax resident from a non-resident company.
Withholding tax on payments from Cyprus to non-residents
Cyprus does not impose any withholding tax on dividend, interest and royalty payments made to non-Cyprus resident recipients.
In the case of royalties, the exemption applies for royalty payments when the right/asset is used outside of Cyprus. When the royalties are connected with the use of the right/asset within Cyprus there is a 10% withholding tax, subject to treaty provisions.