Treaty for the avoidance of double taxation between Cyprus and Lithuania

The Treaty was signed on the 21st of June 2013 and entered into force on the 17th of April 2014.

All necessary procedures have been finalized between Cyprus and Lithuania for the entry into force of the Treaty for the avoidance of double taxation between the two countries.

The Treaty was signed on the 21st of June 2013 and entered into force on the 17th of April 2014.

The provisions of the Treaty and the Protocol thereto in the Treaty apply:

(i) In respect of taxes withheld at source, to income paid or credited on or after the 01 January 2015.

(ii) In respect of any other taxes on income, to income of any other taxable year commencing on or after the 01/01/2015.

Under the agreement, there is no withholding tax on dividends paid by a company resident in Lithuania to a company (but not a partnership) resident in Cyprus provided that the recipient is the beneficial owner of at least 10% of the shares in the company paying the dividend. Otherwise, the maximum rate of withholding tax is 5%.

There are no withholding taxes in Cyprus on dividends paid to non-residents. Interest paid by a resident of one state to a resident of the other is taxable only in the state of residence of the recipient. The maximum withholding tax on royalties is limited to 5%.

Gains derived by a resident of one contracting state from the alienation of immovable property situated in the other contracting state, or from the disposal of immovable or movable property associated with a permanent establishment situated in the other contracting state, may be taxed in the contracting state in which the immovable property or the permanent establishment is situated.

All other gains, including gains on disposal of shares in “property-rich” companies, are taxable only in the country of residence of the disponor.

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