The Double Tax Agreement between Poland and Cyprus was signed on 4th June 1992 and came into force on 9th July 1993. A number of amendments to the Agreement have been negotiated and are due to become effective in 2012. A formal procedure of obtaining the Council of Ministers’ consent to sign the protocol amending DTT has already been launched.
According to informal information from the Cypriot Ministry of Finance, the tax sparing clause which allowed a decrease in the effective tax rate on dividends paid by a Cypriot company to its Polish shareholders was removed, as was discriminatory non-taxation of directors of Cypriot companies who are not Cypriot tax residents. Yet, the Cypriot tax system provides for a capital gains tax exemption on the transfer of shares or on the sale of property owned by the Cypriot company. In addition, Directives such as the Parent-Subsidiary Directive and the Interest & Royalties Directive apply as both states are full members of the EU.
The Double Tax Agreement is just one of fifteen agreements in force between Poland and Cyprus. Such agreements cover a range of subjects including air transport, trade, visas and shipping. In 1998 the two states signed an agreement relating to exchanges in the fields of science, education, culture, art, archaeology, sports and communications. Since EU accession, the two states have found additional areas for closer cooperation, particularly through the joint presidency of the EU by Cyprus, Poland and Denmark from the second half of 2011 till end 2012. The three states have committed to joint action on the economic crisis and the EU's 2014-2020 budget.
The Cyprus-Polish Business Association, officially sponsored by the Polish and Cypriot governments and with many businesses from both states as members, aims to further closer contacts and promotes relationship development on many different levels. In addition to the Business Association, the Polish-Cypriot Chamber of Commerce aids in establishing mutual relations and fosters favorable economic relations between Poland and Cyprus. The objective of the Chamber is to provide entrepreneurs with reliable economic information, advisory and instructional services and promote economic cooperation between the two states. In the immediate future, the Polish-Cypriot Chamber of Commerce plans to expand its activities by dynamically developing its ventures in the Mediterranean region.
Since 2006, the Cyprus Trade Promotion Centre has operated in Warsaw, with the formal status of the Department of Economic & Commercial Affairs of the Embassy of Cyprus in Poland. The goals of the Trade Promotion Centre include stimulating the growth of mutual trade through promoting and creating favourable conditions for entering the Polish market with Cypriot export goods and services, encouraging Polish entrepreneurs to learn about the Cypriot business environment and monitoring trends and development in bilateral trade.
Cyprus has an embassy in Warsaw and 2 honorary consulates (in Gdynia and Szczecin). Poland has an embassy in Nicosia and an honorary consulate general in Limassol.
