Treaty detail
United States - CY tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1984-03-19
Effective
1986-01-01
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 15% · Corporate rate: 5%
The 5 percent corporate rate generally depends on direct ownership of at least 10 percent of the voting stock of the dividend payer. Cypriot domestic withholding rules and the article's holding-period mechanics can change the practical outcome.
Interest
Rate: 10%
IRS Treaty Table 1 reflects a general 10 percent ceiling on qualifying interest, with government and central-bank carve-outs available subject to article-level review.
Royalties
Rate: 0%
The Cyprus treaty generally produces a zero-percent outcome on most royalty categories, although film and tape rentals are subject to reduced separate rates. Article text continues to control.
Permanent establishment
Construction threshold: more than 12 months
Dependent-agent analysis remains important where a person habitually exercises authority to conclude contracts on behalf of the enterprise under the treaty wording.
Other treaty flags
Pension treatment generally follows a residence-state framework, with government-service pensions handled under distinct provisions.
Seeded article summaries
Article 4
Residence
Defines treaty residence and is the gateway to reduced withholding or treaty protection.
Residence under the Cyprus treaty matters particularly because Cyprus is used in many international holding structures. Tie-breaker rules and limitation-on-benefits analysis should both be considered before relying on the treaty.
Article 5
Permanent Establishment
Sets the business-presence threshold that permits source-country taxation of business profits.
The Cyprus treaty generally follows an OECD-style PE definition with a 12-month threshold for construction and installation projects. Dependent-agent and preparatory-activity rules still require article-level review.
Article 7
Business Profits
Generally reserves business profits to the residence state unless a permanent establishment exists in the other state.
This article matters for U.S. firms with Cypriot operating subsidiaries or financial holding structures. Article 5 PE analysis must be completed before reliance on Article 7 protection.
Article 10
Dividends
Provides treaty limits on source-country dividend withholding in qualifying cases.
The dividend article's 5 percent and 15 percent ceilings are the quick snapshot, but practitioners should be alert to limitation-on-benefits screening because Cyprus is frequently used in tax-planning structures.
Article 11
Interest
Limits source-country withholding on qualifying interest.
The Cyprus treaty does not eliminate interest withholding outright, but the 10 percent ceiling provides meaningful reduction in many cases. Beneficial-ownership and treaty-shopping analysis are particularly important here.
Article 12
Royalties
Generally removes source-country withholding on qualifying royalties.
The royalty article generally produces a zero-percent outcome on most categories, although film and tape rentals are subject to reduced separate rates. IP holding structures should still be screened for limitation-on-benefits issues.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Cyprus treaty documents pageVerified 2026-05-20
- Official U.S.-Cyprus treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
- Treasury treaties in force listVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.