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a) Canada Offshore companies, branches and partnerships cannot enjoy the benefits of the treaty. This exclusion does not apply to Cyprus companies owning ships under the Cyprus flag and enjoy full tax exemption in Cyprus. b) France The articles of the treaty in respect of dividends, interest and royalties do not apply to Cyprus offshore companies or branches or partnerships, unless the shareholders of such companies are residents of Cyprus. Profits of a Cyprus ship owning company of which more than 25% of the capital is owned by non residents are taxable in France, if the ship owning company has a permanent establishment in France. c) Germany A protocol to the treaty imposes restrictions on the provisions of the article on the elimination of double taxation. As a result dividends received in Germany from a Cyprus offshore company are taxable in Germany and a tax credit is given for the tax paid in Cyprus. d) United Kingdom Offshore entities are excluded from obtaining relief under the treaty in respect of dividends, interest and royalties received from the UK. e) United States Relief under the treaty is not available where the recipient of income is subject to tax in Cyprus at substantially reduced rates as compared to the rates in the country of his residence. This provision prevents Cyprus offshore and ship owning companies from availing themselves of any benefits under the treaty
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