Finance Minister Makis Keravnos and Swedish Ambassador Martin Hagström signed a Protocol updating the 1988 Double Taxation Convention, integrating modern OECD anti-tax avoidance standards to strengthen economic partnerships.

Formal Bilateral Agreement Reached

Cyprus and Sweden signed Friday a Protocol amending the Convention for the Avoidance of Double Taxation with respect to Taxes on Income. The protocol was signed by Minister of Finance Makis Keravnos and Ambassador of Sweden Martin Hagström, a Finance Ministry press release said here today.

Aligning with Global Tax Standards

The signed Protocol amends the original Convention signed back in 1988. It introduces, among other things, the minimum standards of the Base Erosion and Profit Shifting (BEPS) actions of the Organization for Economic Co-operation and Development, related to bilateral agreements and other amendments that have been bilaterally agreed upon.

Resolving Multilateral Constitutional Roadblocks

The Finance Ministry explains that due to constitutional challenges on behalf of Sweden, which hindered the implementation and entry into force of the Multilateral Agreement (MLI) the objective of which is the automatic, swift and efficient amendment of bilateral treaties by introducing the relevant provisions of BEPS Actions, it was decided to conclude the above-mentioned Protocol towards this direction.

Ratification and Long-Term Economic Goals

The Protocol will enter into force upon completion of the foreseen constitutional ratification procedures by both Contracting States. "Upgrading and expanding the network of Double Taxation Conventions, is of high economic and political importance and aims to further strengthening and attracting investments by promoting Cyprus as an international business center, while promoting tax transparency, fairness and compliance with international acceptable standards," the press release concludes.

Source: CNA(ΚΥΠΕ)