A new double tax agreement between Cyprus and Spain came into force on 28 May 2014. The agreement has been signed by the two countries on 14 February 2013. This is a very welcome development which is expected to increase financial co-operation between Cyprus and Spain.
Going back a few years ago, Spain had unjustifiably blacklisted Cyprus as a tax haven and companies registered in Cyprus did not enjoy several tax exemptions and other tax advantages in Spain. However, these restrictions have been lifted by the Spanish Government and negotiations took place between the two countries with the purpose of entering into a double tax agreement. This tax agreement is now in place and will hopefully lead to improved ties between the two countries and a potential boost to the economy of the island.