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Enforcement of Foreign Judgments in Cyprus
May be enforced under European Union Regulations, Statute and Common Law.
Requirements:
– The foreign judgment has been issued by a court which has jurisdiction in accordance with Cypriot rules on conflict     of laws.
– The enforcement of foreign judgments is not contrary to Cypriot Public policy.
– The foreign judgment has been made on merit and not according to procedure.
– The foreign judgment has not been obtained by fraud and
– The proceedings which led to the issuance of the foreign judgment were not contrary to the laws of natural justice.
Procedure:
Enforcement and execution of foreign judgments in Cyprus, Law No. 121(1)/2000 in relation to the Recognition, Enforcement and Execution of Foreign Judgments applying to all cases in which recognition, registration and enforcement of decisions of foreign courts is requested.
Section 5, requires an application by summons accompanied by an affidavit to be filed at the District Court and in accordance with the applicable Civil Procedure Rules in Cyprus.

Enforcement of EU Judgments
EC Regulation No. 805/2004 – EC Regulation No. 44/2001.
The main source of law is EC Regulation No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
Grounds for Refusal of recognition and enforcement of judgment under Article 34 of EC Regulation No. 44/2001:
– If contrary to the pubic policy of Cyprus.
– If given in default of appearance and the Defendant was not served with the document instituting proceedings in good   time or in a manner as to enable him to prepare his defense.
– If inconsistent with earlier judgment of the Cypriot Courts between the same parties.
– If recognition is inconsistent with earlier judgment given in another Member State or in a third State between the         same parties regarding the same cause of action.
Application of Law No. 121(1)/2000 and in the Foreign Judgment (Reciprocal Enforcement) Law.
Enforcement of non-EU Judgments
Cyprus is signatory to a number of multilateral conventions relating to the recognition and enforcement of foreign judgments including:
– The Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters and             Supplementary Protocol (Hague Convention).
– Hague Convention on the service abroad of Judicial an Extrajudicial Documents in Civil or Commercial Matters 1965.
Article 5 of Hague Convention 1965.
The Central Authority of the State addressed shall itself serve the document or shall arrange to have it served by an appropriate agency e.g. Ministry of Justice of Ukraine, either:
– By a method prescribed by its internal law for the service of documents in domestic actions.
– By a particular method requested by the applicant, unless such a method is incompatible with the law of  the State       addressed.

• Subject to sub-paragraph (b) of the first paragraph of Article 5, the document may always be served by delivery to an addressee who accepts it voluntarily.
  
• Cyprus is party to a number of bilateral treaties in relation to the recognition and enforcement of foreign judgments. Ukraine (Rat. Law 172/86 and 8/2005), Russia (Rat. Law 172/86), Belarus (Rat. Law172/86), Georgia (Rat. Law 172/86).

Enforcement of Foreign Arbitral Awards 
Foreign arbitral awards can be enforced in Cyprus
– By virtue of provisions stated in the Cyprus International Commercial Arbitration Law No.101/1987 and
– The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 which was ratified     by Law No. 84/1979.
Enforcement of Foreign Arbitral Awards under the 1958 New York Convention
It is obliged to enforce awards made in foreign states that are signatories to the Convention, since Convention imposes an obligation on all contracting states to recognise arbitral awards as binding and to enforce them.
Refusal for recognition and enforcement
Reasons for refusal of recognition and enforcement of foreign arbitral award under the New York Convention:
– If Arbitration agreement is invalid under the laws of Cyprus or the laws of the country which it was made,
– or the parties were incapable of entering into an arbitration agreement,
– if the party against whom the award was made was not given proper notice of the appointment of the arbitrator or       the proceedings,
– or was not able to present his case,
– if the foreign award was outside of the arbitration agreement,
– if the composition of the authority was not in line with the agreement of the parties or the applicable law where the     arbitration took place,
– if the award has not yet become binding on the parties or has been set aside or suspended.
Recognition and enforcement of an arbitral award may also be refused by Cypriot courts if the subject matter of the arbitration is not capable for settlement under Cypriot law or if the subject matter violates the public policy of Cyprus.
Enforcement procedure of arbitral award
Party seeking enforcement to submit an application by summons accompanied by an affidavit to be filed at the District Court and in accordance with the applicable Civil Procedure Rules in Cyprus.
Must also produce a duly authenticated original award with the original agreement or certified copies of aforementioned.  Official translation in Greek language also supplemented.
Application fixed within 4 weeks from filing will give the opportunity to the other party to contest application by filing written objection.
Foreign Claims Registration in Cyprus
Claim can be registered in Cyprus if the subject matter of the agreement involves the jurisdiction of Cyprus Courts.
Claim Registration Procedure 
a. Filing of an application for permission to the Court supported by an affidavit which could establish a Prima Facie Case    of Claimant.
b. Permission given if the application for summons is eligible to be delivered outside Cyprus.
c. In Court Claimant submits a request as to whether the process shall be made through the Embassy of the foreign           judicial authority with two copes official certified translations in the language the notice is intended to be given.
d. The Court Registrar will submit copy of application and certified translation into the Foreign Office of Cyprus which      then assumes responsibility to notify the relevant party through contacting the respective Foreign Office of the            Relevant Country.
When the relevant party receives notice of proceedings then the claim can be adjudicated in Cyprus.
Application of Hague Convention on the service abroad of Judicial an Extrajudicial Documents in Civil or Commercial Matters 1965.
Application of Article 5 is also possible if country has ratified Hague Convention on the service abroad of Judicial an
Extrajudicial Documents in Civil or Commercial Matters 1965.
Article 5 of Hague Convention 1965. 
The Central Authority of the State addressed shall itself serve the document or shall arrange to have it served by an
appropriate agency e.g. Ministry of Justice of Ukraine.
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Scope to promote and strengthen economic, scientific, technical and industrial cooperation of these two countries on a mutual benefit basis.
Ratification of New DTT between Cyprus and Ukraine

• On 4 July 2013 the Verkhovna Rada of Ukraine approved the bill in Ukraine:

“On Ratification of the Convention between the Government of Ukraine and the Government of  the Republic of Cyprus for the avoidance of double taxation and the prevention of fiscal evasion on taxes on income and the Protocol thereto”
– Double Taxation Treaty and Protocol signed on 8 November 2012 in Nicosia,  during the visit of the President of             Ukraine Mr. Victor Yanukovych in Cyprus.  
– The Double Taxation Treaty and Protocol will come in force on notification of of completion of all domestic                 procedures, effectively by the 1 January 2014.
– The new Double Taxation Treaty will replace the old treaty, between USSR and Cyprus of 1982.

Withholding Tax Rates
The withholding tax rates (WHT) provided are:
A. Dividends (Article 10):
5% WHT, if the holding participation is at least 20% or the direct investment is 100,000 Euros.
In all other cases the WHT imposed will be 15%.
Example:
A Cyprus tax resident company receives dividends from its 100% Ukrainian subsidiary.
Dividends will be subject to 5% withholding tax in Ukraine.
In Cyprus, dividends received from a Ukrainian subsidiary will not be subject to any taxation.
B. Interest (Article 11):
2% WHT.
Example:
A Cyprus tax resident company receives interest income from its Ukrainian borrower.
– Interest income will be subject to 2% withholding tax in Ukraine.
– Interest income less any relevant expenses (i.e. interest expense) will be subject to taxation in Cyprus.
– The withholding tax paid in Ukraine can be used as a tax credit against the taxation generated in Cyprus.
C. Royalties (Article 12):
5% WHT on income from copyright of scientific work, trademarks and formulas. 10% WHT in all other cases.
Royalties arising in a contracting state and paid to a resident of the other contracting state will be subject to 5% withholding tax.
In all other cases the withholding tax rate is 10%.
Example:
A Cyprus resident company receives royalty income on patents from Ukrainian Company.
Royalty income paid in Cyprus subject to 5% withholding tax in Ukraine.
In Cyprus, 80% of the royalty profit is considered as a deemed expense, only 20% of royalty profit subject to 12.5% corporation tax in Cyprus, in effect 2,5% on income.
Since withholding tax is paid in Ukraine used as a tax credit against the tax liabilities raised in Cyprus, therefore no additional tax will be generated in Cyprus.
Permanent Establishment (Article 5) of the OECD Model Tax Convention
The “Permanent Establishment” provisions contained in the New DTT are in accordance with the OECD Model Treaty,
“A fixed place of business where the business of an enterprise is wholly or partly carried on”.
2. The term “permanent establishment” includes especially:
a) place of management;
b) a branch;
c) an office
d) a factory;
e) a workshop, and
f) a mine, an oil or gas well, a quarry or other place of extraction of natural resources.
A building site or construction or installation project constitutes a permanent
establishment only if it lasts more than twelve months.
PE will also include a warehouse or other structure that is used for the sale of goods.
PE any supervisory activities carried out in connection with a construction or installation project for a period exceeding 12 months in a year.
Director’s fees
Director’s fees received by a resident of a contracting state may be taxed in the other state where the company has its residency.
Example:
A Ukrainian individual serves on the Board of Directors of a Cyprus tax resident company and receives director’s fees.
Under the new Treaty, such director’s fees may be subject to taxation in Cyprus and not in Ukraine.
Beneficial Ownership – Right to receive income
Ukrainian legislation, Article 103 § 3 of Tax Code “Beneficial Owner is the individual person entitled to receive such income”.
Under the new DTT nominees and agents are excluded from such income, only the Beneficial Owner.
Immovable Property (article 6):
Any income generated from immovable property located in either of the Contracting States, may be subject to tax at the state where the immovable property is located.
Capital Gains (article 13):
Gains realised by Cyprus residents from the alienation of shares in Ukrainian companies of any kind as well as real estate companies will not be taxed in Ukraine.
Cyprus Resident Company having a shareholding participation in a Ukrainian Company possessing immovable property located in Ukraine, on disposal of such shares, Cyprus that has the right to impose capital gains tax.
Cyprus fully exempts Capital Gains Tax on the sale of securities (including shares), if immovable property located outside Cyprus.
Elimination of Double Taxation (article 21):
Income tax which may be payable by a resident of a Contracting State in the other Contracting State shall be tax deductible in the state of residence.
Conclusion
The Treaty allows Cyprus to remain one of the most beneficial jurisdictions for investment in Ukraine.
Removes the uncertainty and controversy created by the applicability of the old treaty with the former USSR.
Investments in Ukraine through Cyprus will continue to increase in a stable tax environment and planning of future investments.
The new Treaty in combination with the favorable tax system offering the low tax rate of 12.5%, and the legal framework in Cyprus guarantees the required stability and promotes investment, no tax on any dividend income earned, reduced tax rates on any income arising from royalties, whereas no tax is charged in Cyprus for any income relating to the sale of the shares of any company including immovable property which is situated in Ukraine.