Cyprus and Luxembourg signed a tax treaty on 8 May 2017. The treaty is expected to strengthen economic ties between the two EU member states. The treaty, which is based on the OECD model treaty, provides for the following maximum withholding tax rates on dividends, interest and royalty payments: Dividends: No withholding tax on dividends paid to a company that holds directly at least 10% of the capital of the dividend paying company; otherwise, the rate will be 5%. Interest a