Tax Alert – Double Tax Treaty with Ethiopia

Tax Alert – Double Tax Treaty with Ethiopia

Following the conclusion of a series of negotiations Cyprus signed a Double Tax Treaty with Ethiopia. Provided that the ratification procedures are completed within 2016, the treaty will be effective as from 1 January 2017 onwards.

The treaty is based on the OECD Model Tax Convention and provides for a 5% withholding tax on:

• Dividends
• Interest
• Royalties

Moreover, it is noted that gains from the sale of shares are subject to tax in the country where the seller is located (no property rich clause).