Yiota Michael
Senior Associate - Tax Department

A Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was signed on 17.12.2021 between the Republic of Cyprus and the Hashemite Kingdom of Jordan.

According to the Circular 6/2022 issued by the Cyprus Tax Department on 20th May 2022 the ratification process is finalised by both countries and the Treaty entered into force on 11 April, 2022 whereas its provisions will enter into effect as from 1st January 2023. 

The Treaty is based on the OECD’s and United Nations Model Conventions. . 
The Treaty incorporates the Base Erosion and Profit Shifting minimum standards and also the latest standards in relation to the exchange of information, mutual agreement procedure and principal purpose test.

Below is a summary of the main provisions of the Treaty:

  • Dividends

A 5% WHT if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends. For all other cases, the treaty provides for a maximum 10% WHT.

  • Interest

A 5% WHT on interest payments, provided that the recipient is the beneficial owner of such interest. Nil WHT for interest payments where the beneficial owner of the interest is the Government, a political subdivision, a local authority or the National Bank of the other Contracting State.


  • Royalties and fees for technical services

A 7% WHT on royalties and fee payments for technical services, provided that the recipient is the beneficial owner of such royalties/fees.

  • Capital gains

Gains derived by a resident of a Contracting State from the alienation of shares in a company deriving more than 50% of their value directly from immovable property situated in the other Contracting State, and only those gains attributable to the immovable property, may be taxed in that other State.
An exemption applies for the alienation of shares listed on an approved stock exchange.
Gains derived by a resident of a Contracting State from the alienation of shares in a company deriving their value or greater part of their value directly or indirectly from exploration or exploitation rights; or from property situated in the other Contracting State and used in the exploration or exploitation of the seabed or subsoil or their natural resources situated in the other State; or from such rights and such property taken together, may be taxed in that other State.  

Entitlement to benefits
The Treaty contains a principal purpose test, whereby treaty benefits may be denied in respect of an item of income or capital in cases where it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining treaty benefits was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit.

The agreement with Hashemite Kingdom of Jordan is expected to enhance economic and trade ties with Cyprus, providing new opportunities and better protection to tax residents of both countries.

Upgrading and expanding the network of Double Taxation Conventions, is of high economic and political importance and aims to further strengthen Cyprus as an international business centre.



Tax Department