ARTICLE 12 Dividends 　　(1) Dividends derived from sources within Cyprus by a resident of the United States shall not be subject to any tax imposed by Cyprus in excess of the tax imposed with respect to the profits or earnings out of which such dividends are paid. An individual resident of the United States shall be entitled to a refund of any Cypriot tax imposed with respect to the profits or earnings out of which a dividend is paid to the extent that said tax exceeds the individual's tax liability in Cyprus. 　　(2) The rate of tax imposed by the United States on dividends, other than dividends of the type described in paragraph 4(b), derived from sources within the United States by a resident of Cyprus shall not exceed: 　　(a) 15 percent of the gross amount of the dividend; or 　　(b) When the recipient is a corporation, 5 percent of the gross amount of the dividend if: 　　(i) During the part of the paying corporation's taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10 percent of the outstanding shares of the voting stock of the paying corporation was owned by the recipient corporation; and 　　(ii) Not more than 25 percent of the gross income of the paying corporation for such prior taxable year (if any) consists of interest or dividends (other than interest derived from the conduct of a banking, insurance, or financing business and dividends or interest received from subsidiary corporations, 50 percent or more of the outstanding shares of the voting stock of which is owned by the paying corporation at the time such dividends or interest is received). 　　(3) Paragraphs (1) and (2) shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State a permanent establishment and the shares with respect to which the dividends are paid are effectively connected with such permanent establishment. In such a case, the provisions of Article 8 (Business Profits) shall apply. 　　(4) Dividends paid by a corporation of a Contracting State to a person other than a resident of the other Contracting State shall be exempt from tax by the other Contracting State, unless 　　(a) The recipient of the dividends has a permanent establishment in the other Contracting State and the shares with respect to which the dividends are paid are effectively connected with such permanent establishment; or 　　(b) The corporation paying the dividends is a Cypriot corporation which derives 50 percent or more of its total gross income from one or more permanent establishments which such corporation has in the United States. ARTICLE 13 Interest (1) Interest derived from sources within a Contracting State by a resident of the other Contracting State may be taxed by both Contracting States. 　　(2) The rate of tax imposed by a Contracting State on interest, other than interest described in paragraph 7(c) of this Article, derived from sources within that Contracting State by a resident of the other Contracting State shall not exceed 10 percent of the gross amount of such interest. 　　(3) Notwithstanding paragraphs (1) and (2), interest beneficially derived by: 　　(a) A Contracting State, or an instrumentality of that Contracting State not subject to tax by that Contracting State on its income; 　　(b) A resident of a Contracting State with respect to debt obligations (including any related debt obligations) guaranteed or insured by that Contracting State or an instrumentality thereof; 　　(c) A bank or other financial institution; or 　　(d) A resident of a Contracting State with respect to debt obligations arising in connection with the sale of property or the performance of services;shall be exempt from tax by the other Contracting State. 　　(4) Paragraphs (2) and (3) shall not apply if the recipient of the interest, being a resident of a Contracting State, has a permanent establishment in the other Contracting State and the indebtedness giving rise to the interest is effectively connected with such permanent establishment. In such a case, the provisions of Article 8 (Business Profits) shall apply. 　　(5) Where any interest paid by a person to any related person (within the meaning of Article 11 (Related Persons)) exceeds an amount which would have been paid to an unrelated person, the provisions of this Article shall apply only to so much of the interest as would have been paid to an unrelated person. In such a case the excess payment may be taxed by each Contracting State according to its own law, including the provisions of this Convention where applicable. 　　(6) The term "interest" as used in this Convention means income from bonds, debentures,government securities, notes, or other evidences of indebtedness, whether or not secured and whether or not carrying a right to participate in profits, and debt claims of every kind, as well as all other income which, under the taxation law of the Contracting State in which the income has its source, is assimilated to income from money lent. 　　(7) Interest paid by a resident of a Contracting State to a person other than a resident of the other Contracting State shall be exempt from tax by the other Contracting State, unless: 　　(a) Such interest is treated as income from sources within the other Contracting State under paragraph (2) of Article 6 (Source of Income); 　　(b) The recipient of the interest has a permanent establishment in the other Contracting State and the indebtedness giving rise to the interest is effectively connected with such permanent establishment; or 　　(c) The resident paying the interest is a Cypriot corporation which derives 50 percent or　more of its total gross income from one or more permanent establishments which such　corporation has in the United States. ARTICLE 14 Royalties 　　(1) Royalties derived from sources within a Contracting State by a resident of the other Contracting State shall be exempt from tax by the first-mentioned Contracting State. 　　(2) The term "royalties" as used in this Article means: 　　(a) Payment of any kind made as consideration for the use of, or the right to use,copyrights of literary, artistic, or scientific works, motion pictures and works on film, videotape or other means of reproduction used for radio or television broadcasting, patents, designs, models, plans, secret processes or formulae, trademarks, or other like property or rights, or knowledge, experience, or skill (know how); and 　　(b) Gains derived from the sale, exchange, or other disposition of any such property or rights to the extent that the amounts realized on such sale, exchange, or other disposition for consideration are contingent on the productivity, use, or disposition of such property or right. 　　(3) Paragraph (1) shall not apply if the recipient of the royalties, being a resident of a Contracting State, has a permanent establishment in the other Contracting State and the property or rights giving rise to the royalties are effectively connected with such permanent establishment. In such a case, the provisions of Article 8 (Business Profits) shall apply. 　　(4) Where any royalty paid by a person to any related person (within the meaning of Article 11 (Related Persons)) exceeds an amount which would have been paid to an unrelated person, the provisions of this Article shall apply only to so much of the royalty as would have been paid to an unrelated person. In such a case the excess payment may be taxed by each Contracting State according to its own law, including the provisions of this Convention where applicable. ARTICLE 15 Income from Real Property 　　(1) Income from real property, including royalties and other payments in respect of the exploitation of natural resources and gains derived from the sale, exchange, or other disposition of such property or of the right giving rise to such royalties or other payments, may be taxed by the Contracting State in which such real property or natural resources are situated. For purposes of this Convention, interest on indebtedness secured by real property or secured by a right giving rise to royalties or other payments in respect of the exploitation of natural resources shall not be regarded as income from real property. 　　(2) Paragraph (1) shall apply to income derived from the usufruct, direct use, letting, or use in any other form of real property. 　　(3) A resident of a Contracting State who is subject to tax in the other Contracting State on income from real property, including royalties and other payments in respect of the exploitation of natural resources and gains derived from the sale, exchange or other disposition of such property or of the right giving rise to such royalties, may elect for any taxable year to compute that tax on such income on a net basis as if such resident were engaged in trade or business in the other Contracting State. Any such election shall be binding for the taxable year of the election and all subsequent taxable years unless the competent authorities of the two Contracting States, pursuant to a request by the taxpayer made to the competent authority of the Contracting State in which the tax payer is a resident, agree to terminate the election. ARTICLE 16 Gains 　　(1) A resident of a Contracting State shall be exempt from tax by the other Contracting State on gains from the sale, exchange or other disposition of assets unless the gain is derived from the sale, exchange or other disposition: 　　(a) where the United States is the other State, real property referred to in Article 15 (Income from Real Property) which is situated in the United States and a United States real property interest; and 　　(b) where Cyprus is the other State, real property referred to in Article 15 (Income from Real Property) which is situated in Cyprus and an interest in real property situated in Cyprus. 　　(c) property (other than property described in subparagraphs (a) and (b)) forming part of the business property of a permanent establishment which a resident of a Contracting State has in the other Contracting State or property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base. 　　(2) In the case of gains described in paragraph 1(a) and (b), the provisions of Article 15 (Income from Real Property) shall apply. In the case of gains described in paragraph 1(c) the provisions of Article 8 (Business Profits), Article 15 (income from Real Property) or Article 17 (Independent Personal Services) shall apply, as the case may be. 　　(3) For purposes of this Convention, a United States real property interest shall be considered to be situated in the United States, and an interest in real property situated in Cyprus shall be considered to be situated in Cyprus. ARTICLE 17 Independent Personal Services 　　(1) Income derived by an individual who is a resident of a Contracting State from the performance of personal services in an independent capacity may be taxed by that Contracting State. Except as provided in paragraph (2) such income shall be exempt from tax by the other Contracting State. 　　(2) Income derived by an individual who is a resident of a Contracting State from the performance of personal services in an independent capacity in the other Contracting State may be taxed by that other Contracting State, if: 　　(a) The individual is present in that other Contracting State for a period or periods aggregating 183 days or more in the taxable year; or 　　(b) The individual has a fixed base regularly available to him in that other Contracting State for the purpose of performing his services, but only so much of the income as is attributable to such fixed base. ARTICLE 18 Dependent Personal Services 　　(1) Wages, salaries, and similar remuneration derived by an individual who is a resident of a Contracting State from labor or personal services performed as an employee, including income from services performed by an officer of a corporation, may be taxed by that Contracting State. Except as provided by paragraph (2) such remuneration derived from sources within the other Contracting State may also be taxed by that other Contracting State. 　　(2) Remuneration described in paragraph (1) derived by an individual who is a resident of a Contracting State shall be exempt from tax by the other Contracting State if: 　　(a) He is present in that other Contracting State for a period or periods aggregating less than 183 days in the taxable year; 　　(b) The remuneration is paid by, or on behalf of, an employer who is not a resident of that other Contracting State; and 　　(c) The remuneration is not borne as such by a permanent establishment, a fixed base or a trade or business which the employer has in that other Contracting State. 　　(3) Notwithstanding paragraph (2), remuneration derived by an individual from the performance of labor or personal services as an employee aboard ships or aircraft operated by a resident of a Contracting State in international traffic shall be exempt from tax by the other Contracting State if such individual is a member of the regular complement of the ship or aircraft. ARTICLE 19 Artistes and Athletes 　　(1) Notwithstanding the provisions of Articles 17 (Independent Personal Services) and 18 (Dependent Personal Services), income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State, except where the amount of the gross receipts derived by such entertainer or athlete, not including expenses reimbursed to him or borne on his behalf, from such activities does not exceed five hundred United States dollars or its equivalent in Cypriot pounds per day, or five thousand United States dollars or its equivalent in Cypriot pounds for the taxable year concerned. 　　(2) To the extent that income in respect of activities exercised by an entertainer or an athlete in his capacity as such accrues not to that entertainer or athlete but to another person, that income may, notwithstanding the provisions of Articles 8 (Business Profits), 17 (Independent Personal Services), and 18 (Dependent Personal Services), be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. For purposes of the preceding sentence, income of an entertainer or athlete shall be deemed not to accrue to another person if it is established that neither the entertainer or athlete, nor persons related thereto, participate directly or indirectly in the profits of such other person in any manner, including the receipt of deferred remuneration, bonuses, fees, dividends, partnership distributions or other distributions. ARTICLE 20 Directors' Fees 　　Fees derived by a resident of a Contracting State in his capacity as a member of the board of directors of a corporation of the other Contracting State (but not including fixed or contingent payments derived in his capacity as an officer or employee) may, to the extent such fees are in excess of a reasonable fixed amount for each day of attendance payable to all directors of the corporation for attendance at the directors' meeting in such other Contracting State, be taxable in such other Contracting State. ARTICLE 21 Students and Trainees 　　(1) (a) An individual who is a resident of a Contracting State at the time he becomes temporarily present in the other Contracting State and who is temporarily present in that other Contracting State for the primary purpose of: 　　(i) Studying at a university or other recognized educational institution in that other Contracting State; or 　　(ii) Securing training required to qualify him to practice a profession or professional specialty; or 　　(iii) Studying or doing research as a recipient of a grant, allowance, or award from a governmental, religious, charitable, scientific, literary, or educational organization; shall be exempt from tax by that other Contracting State for a period not exceeding five taxable years from the date of his arrival in that other Contracting State, and for such additional period of time as is necessary to complete, as a full time student, educational requirements as a candidate for a postgraduate or professional degree from a recognized educational institution, with respect to amounts described in subparagraph (b). 　　(b) The amounts referred to in subparagraph (a) are: 　　(i) Gifts from abroad for the purpose of his maintenance, education or training; 　　(ii) The grant, allowance or award; and 　　(iii) Income from personal services performed in that other Contracting State in an amount not in excess of 2,000 United States dollars or its equivalent in Cypriot pounds for any taxable year. 　　(2) An individual who is a resident of a Contracting State at the time he becomes temporarily present in the other Contracting State and who is temporarily present in that other Contracting State as an employee of, or under contract with, a resident of the first-mentioned Contracting State, for the primary purpose of: 　　(a) Acquiring technical, professional, or business experience from a person other than a resident of the first-mentioned Contracting State or other than a person related to such resident; or 　　(b) Studying at a university or other recognized educational institution in that other Contracting State; shall be exempt from tax by that other Contracting State for a period not exceeding one year with respect to his income from personal services in an aggregate amount not in excess of seven thousand five hundred United States dollars or its equivalent in Cypriot pounds. 　　(3) An individual who is a resident of a Contracting State at the time he becomes temporarily present in the other Contracting State and who is temporarily present in the other Contracting State for a period not exceeding one year, as a participant in a program sponsored by the Government of that other Contracting State, for the primary purpose of training, research, or study, shall be exempt from tax by that other Contracting State with respect to his income from personal services in respect of such training, research, or study performed in that other Contracting State in an aggregate amount not in excess of ten thousand United States dollars or its equivalent in Cypriot pounds. ARTICLE 22 Governmental Functions 　　Wages, salaries, and similar remuneration, including pensions, annuities, or similar benefits, paid from public funds of a Contracting State to a citizen of that Contracting State for labor or personal services performed as an employee of that Contracting State in the discharge of governmental functions shall be exempt from tax by the other Contracting State. ARTICLE 23 Private Pensions and Annuities 　　(1) Except as provided in Article 22 (Governmental Functions) pensions and other similar remuneration paid to an individual who is a resident of a Contracting State in consideration of past employment shall be taxable only in that Contracting State. 　　(2) Alimony and annuities paid to an individual who is a resident of a Contracting State shall be taxable only in that Contracting State. 　　(3) The term "pensions and other similar remuneration," as used in this Article, means periodic payments made: 　　(a) By reason of retirement or death in consideration for services rendered; or 　　(b) By way of compensation for injuries received in connection with past employment. 　　(4) The term "annuities", as used in this Article, means a stated sum paid periodically at stated times during life, or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 　　(5) The term "alimony", as used in this Article, means periodic payments made pursuant to a decree of divorce, separate maintenance agreement, or support or separation agreement which is taxable to the recipient under the internal laws of the Contracting State of which he is a resident. ARTICLE 24 Social Security Payments 　　Social security payments and other public pensions paid by a Contracting State to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned Contracting State. This Article shall not apply to payments described in Article 22 (Governmental Functions). ARTICLE 25 Diplomatic and Consular Officers 　　Nothing in this convention shall affect the fiscal privileges of diplomatic and consular officials under the general rules of international law or under the provisions of special agreements. ARTICLE 26 Limitation on Benefits 　　(1) A person (other than an individual) which is a resident of a Contracting State shall not be entitled under this Convention to relief from taxation in the other Contracting State unless 　　(a) more than 75 percent of the beneficial interest in such person (or in the case of a corporation, more than 75 percent of the number of shares of each class of the corporation's shares) is owned, directly or indirectly, by one or more individual residents of the firstmentioned Contracting State; and 　　(b) the gross income of such person is not used in substantial part, directly or indirectly,to meet liabilities (including liabilities for interest or royalties) to persons who are residents of a State other than a Contracting State and who are not citizens of the United States. 　　For the purposes of subparagraph a), a corporation that has substantial trading in its stock on a recognized exchange in a Contracting State is presumed to be owned by individual residents of that Contracting State. A stock exchange shall be treated as a "recognized exchange" by agreement of the competent authorities of the Contracting States. 　　(2) Paragraph 1 shall not apply if it is determined that the establishment, acquisition and maintenance of such person and the conduct of its operations did not have as a principal purpose obtaining benefits under the Convention. 　　(3) Where: 　　(a) income derived by a trustee is to be treated for the purposes of this Convention as income of a resident of one of the Contracting States; and 　　(b) the trustee derived the income in connection with a scheme a principal purpose of which was to obtain a benefit under this Convention, then, notwithstanding any other provision of this Convention, the Convention does not apply in relation to that income. ARTICLE 27 Mutual Agreement Procedure 　　(1) Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of the Contracting States, present his case to the competent authority of the Contracting State of which he is a resident. Should the resident's claim be considered to have merit by the competent authority of the Contracting State to which the claim is made, it shall endeavor to come to an agreement with the competent authority of the other Contracting State with a view to the avoidance of taxation contrary to the provisions of this Convention. 　　(2) The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the application of this Convention. In particular, the competent authorities of the Contracting States may agree: 　　(a) To the same attribution of income, deductions, credits or allowances of a resident of a Contracting State to its permanent establishment situated in the other Contracting State; 　　(b) To the same allocation of income, deductions, credits, or allowances between persons, including a uniform position on the application of the requirements of paragraph (2) of Article 7 (Non-Discrimination); 　　(c) To the same determination of the source of particular items of income; 　　(d) To a uniform accounting for income and deductions; 　　(e) To the same characterization of particular items of income; and 　　(f) To a common meaning of a term. 　　The competent authorities may also consult together for the elimination of double taxation in cases not provided for in the Convention. 　　(3) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of this Article. When it seems advisable for the purpose of reaching agreement, the competent authorities may meet together for an oral exchange of opinions. 　　(4) In the event that the competent authorities of the Contracting States reach such an agreement, taxes shall be imposed and refund or credit of taxes shall be allowed by the Contracting States in accordance with such agreement. Such a refund or credit of tax shall be allowed notwithstanding any time limits in the domestic law of the Contracting States. 　　(5) In cases where this Convention specifies a dollar amount, the competent authorities may agree to a higher dollar amount. 　　(6) The competent authorities of the Contracting States may prescribe such rules and procedures as are necessary to carry out the purposes of this Convention. ARTICLE 28 Exchange of Information 　　(1) The competent authorities of the Contracting States shall exchange such information as is pertinent to carrying out the provisions of this Convention and of the domestic laws of the Contracting States concerning taxes covered by this Convention. 　　(a) The competent authority of each Contracting State shall be empowered by this Convention to secure within that State such information as is necessary to comply with this provision. 　　(b) Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those (including a court or administrative body) concerned with assessment, collection, enforcement, or prosecution in respect of or administration of the taxes which are the subject of this Convention. 　　(2) If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall obtain the information to which the request relates in the same manner as if the tax of the first-mentioned Contracting State were the tax of that other Contracting State and were being imposed by that other Contracting State. If specifically requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall provide information under this Article in the form of depositions of witnesses and authenticated copies of unedited original documents (including books, papers, statements, records, accounts, or writings), to the same extent such depositions and documents can be obtained under the laws and administrative practices of such other Contracting State with respect to its own taxes. 　　(3) In no case shall the provisions of paragraphs (1) or (2) be construed so as to impose on a Contracting State the obligation: 　　(a) To carry out administrative measures at variance with the laws or the administrative practice of that Contracting State or the other Contracting State; 　　(b) To supply particulars which are not obtainable under the laws, or in the normal course of the administration, of that Contracting State or of the other Contracting State; or 　　(c) To supply information which would disclose any trade, business, industrial,commercial, or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. 　　However, each Contracting State may, at its discretion, provide assistance which, under subparagraphs (a), (b) and (c), it is not obligated to provide. 　　(4) The exchange of information shall be either on a routine basis or on request with reference to particular cases. The competent authorities of the Contracting States may agree on the information which shall be furnished on a routine basis. 　　(5) The competent authorities of the Contracting States shall notify each other of any amendments of the tax laws referred to in paragraph (1) of Article 1 (Taxes Covered) and the adoption of any taxes referred to in paragraph (2) of Article 1 (Taxes Covered) by transmitting the texts of any amendments or new statutes. 　　(6) The competent authorities of the Contracting States shall notify each other of the publication by their respective Contracting States of any material concerning the application of this Convention, whether in the form of regulations, rulings, or judicial decisions, by transmitting the texts of any such materials. ARTICLE 29 Assistance in Collection 　　(1) Each of the Contracting States shall endeavor to collect on behalf of the other Contracting State such taxes imposed by that other Contracting State as will ensure that any exemption or reduced rate of tax granted under this Convention by that other Contracting State shall not be enjoyed by persons not entitled to such benefits. 　　(2) In no case shall this Article be construed so as to impose upon a Contracting State the obligation to carry out measures at variance with the laws, administrative practices, or public policy of either Contracting State with respect to the collection of its own taxes. ARTICLE 30 Entry into Force 　　This Convention shall be ratified and instruments of ratification shall be exchanged at Washington as soon as possible. It shall enter into force upon the exchange of the instruments of ratification. The provisions shall for the first time have effect with respect to income of calendar years or taxable years beginning (or in the case of taxes payable at the source, payments made) on or after the first day of January of the year next following the year in which this Convention enters into force. ARTICLE 31 Termination 　　This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after five years from the date on which this Convention enters into force provided that at least six months' prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have force and effect as respects income of calendar years or taxable years beginning (or, in the case of taxes payable at the source, payments made) on or after the first day of January next following the expiration of the six month period. DONE AT NICOSIA in duplicate in the English language this l9th day of March, 1984. FOR THE UNITED STATES　　　　 FOR THE REPUBLIC OF AMERICA: 　　 OF CYPRUS: Raymond C. Ewing 　　　 George Iacovou