Once effective (January 1, 2015), the new DTT will replace the current one between Cyprus and Norway.

Under the new DTT there is no withholding tax on interest and royalties. The following WHT rates apply on dividends:

  • 0% if the beneficial owner of the shares is a company (other than a partnership), which holds directly at least 10% of the capital of the company paying the dividends or if the beneficial owner of the shares is the government of one of the two states.
  • 15% in all other cases. We note a protocol to the new DTT provides that if Norway enters into a future agreement with any European Economic Area (EEA) or Europeran Union (EU) state which provides for a lower WHT, proceedings will commence for the purpose of changing this provision for the same lower WHT rate. Additionally, Cyprus does not provide under its domestic legislation for WHT on all payments of dividends to non-Cyprus tax residents.

According to the new DTT, Cyprus retains the exclusive taxing rights on disposals by Cyprus tax residents of shares in Norwegian companies including those which own Norwegian immovable property.