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Cyprus – Jordan Tax Treaty Signed and Ratified


On December 17th 2021, Cyprus signed a new tax treaty with the Hashemite Kingdom of Jordan for the avoidance of double taxation, which was ratified and published in the Cyprus Gazette on December 31st 2021, contributing to the development of economic relations and enhancement of co-operation in tax matters between the two countries.

The Treaty is based on the OECD Model Convention for the Elimination of Double Taxation on Income and on Capital and the UN Model Tax Agreement and it incorporates the Base Erosion and Profit Shifting (‘BEPS’) minimum standards.

The Treaty will be in effect the year after the ratification process is completed by the Hashemite Kingdom of Jordan. Should the agreement be ratified within 2022, the agreement will be effective as of January 2023.

A summary of the main provisions of the Treaty follows.


  • If the recipient/beneficial owner of the dividends is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends, then a 5% withholding tax is applied on dividends.
  • In all other cases a 10% withholding tax applies.


  • A 5% withholding tax applies should the recipient be the beneficial owner of such income.
  • Nil withholding tax applies in cases where the beneficial owner is the Government, a political subdivision, a local authority or the National Bank of the other contracting state.

Royalties or Fees for Technical Services:

  • A 7% withholding tax applies on royalties or fees for technical services (as defined in the Treaty) on condition that the recipient is the beneficial owner of such income.

Capital gains tax:

  • Should gains be derived by a resident of a Contracting State from the alienation of shares in a company deriving more than 50% of their value directly from immovable property situated in the other Contracting State, and only those gains attributable to the immovable property, they may be taxed in that other State.
  • An exemption applies for the alienation of shares listed on an approved stock exchange.
  • Gains derived:
  1. by a resident of a Contracting State from the alienation of shares in a company deriving their value or greater part of their value directly or indirectly from exploration or exploitation rights;
  2. from property situated in the other Contracting State and used in the exploration or exploitation of the seabed or subsoil or their natural resources situated in the other State;
  3. from such rights and such property taken together, may be taxed in that other State.

Entitlement to benefits:

A specific article of the Treaty (Article 29) limits the entitlement to benefits should it be concluded, taking all relevant facts and circumstances into consideration, that gaining the benefit has been one of the principal purposes of the arrangement/transaction in question which resulted in that benefit directly or indirectly.

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