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Finance Ministry satisfied over update of avoidance of double taxation treaty with Russia

11/08/2020 09:37

Cyprus' Finance Ministry has expressed satisfaction over the conclusion on August 10, after extensive negotiations, of the updating of the Treaty for the Avoidance of Double Taxation between the Republic of Cyprus and the Russian Federation.

A press release issued by the Ministry said that the Russian side demanded the amendment of two fundamental articles of the Treaty, so as to increase the tax on incomes from dividends and from interests to 15% respectively.

The Cypriot side secured, among others, the exception from the tax withheld of a type of regulated entities as pension funds and insurance companies, as well as listed companies with a specific shareholder classification.

Moreover, among others, payments of interests from corporate and government debt instruments as well as Eurobonds are exempted from the tax that is withheld.

The Cypriot side also secured the maintaining of the tax withheld for rights at 0%.

The aim of the two sides is for the agreement to be signed this Autumn, so that it will come into  force on January 1st 2021.

The Russian side assured that it will withdraw the processes for terminating the Treaty and that the same arrangements will be in effect for other countries which maintain such agreements from the same date as for Cyprus, which is 1/1/2021, since it is a single budget and tax policy aiming at raising public income.

The press release said that maintaining the current network of Double Taxation Avoidance Treaties constitutes a priority for the government, and therefore updating them taking into consideration the changing international conditions is indispensable.