Cyprus and Sweden sign protocol to amend double taxation agreement

On Friday, July 3, the Republic of Cyprus and the Kingdom of Sweden signed a protocol in Nicosia to amend the existing Convention for the Avoidance of Double Taxation regarding income taxes. The document was signed by Cypriot Minister of Finance Makis Keravnos and the Swedish Ambassador to Cyprus, Martin Hagström. This agreement modifies the original convention, which was signed in London on October 25, 1988. The protocol incorporates the minimum standards of the Base Erosion and Profit Shifting (BEPS) framework established by the Organisation for Economic Co-operation and Development (OECD). It also includes new provisions for the bilateral exchange of tax information. The decision to sign a specific protocol rather than utilizing the Multilateral Instrument (MLI) was taken to circumvent constitutional difficulties in Sweden that hindered the implementation of the MLI. The agreement will officially enter into force once both nations complete their respective internal ratification procedures. The Cypriot Ministry of Finance stated that this update aims to attract foreign investment, promote the island as a business hub, and strengthen tax transparency.