The amending protocol to the 2011 income and capital tax treaty between Cyprus and Germany entered into force on 8 December 2021. The protocol, signed 19 February 2021, is the first to amend the treaty and includes the following changes:
- The preamble is replaced in line with OECD BEPS standards;
- Article 7 (Business Profits) is replaced with updated provisions in line with OECD standards;
- Article 27 (Application of the Agreement in Special Cases) is amended with the addition of a second paragraph providing that a benefit under the treaty will not be granted in respect of an item of income if it is reasonable to conclude that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit would be in accordance with the object and purpose of the relevant provisions of the treaty; and
- Paragraph 5.4 of the final protocol signed with the treaty is deleted, which concerns the exchange and use of personal data.
The protocol applies from 1 January 2022.