According to the provisions of the third Greek bailout, the withholding tax of 26% is abolished for countries with “privileged tax regime” in which Cyprus was included.
The application of this led to excessive administrative procedures and expenses, which could not be justified by the received income.
As a reminder, according to the related law, as it was amended in March 2015, the 26% tax levy applied for Greek companies purchasing goods or other materials from a company established in a jurisdiction with a favorable tax regime, such as Cyprus. If within 12 months, the company proved to the tax authorities that the transaction was effective, then it would be reimbursed.
The revocation of the 26% withholding tax will encourage trading between Cypriot and Greek companies. For further information on the formalities of transactions between Cyprus and Greece, you can get in touch with our experts.