Cyprus and Russia have agreed on an amendment of the double taxation treaty between the two countries, according to Cypriot Finance Minister Constantinos Petrides, cutting short the two-day negotiation agenda initially scheduled.
The Cypriot side ensured, among other things, the exemption from a 15 per cent withholding tax on dividends for regulated entities, such as pension funds and insurance companies, as well as listed companies.
In addition, interest payments from corporate and government bonds as well as Eurobonds are excluded from the 15 per cent withholding tax in the new Cyprus Russia Double Tax Treaty.
Any other type of Cyprus-based entities will still be able to avoid double taxation, but at a higher rate of 15 per cent.
As statement from the Cyprus finance ministry said it was satisfied with the completion “after extensive negotiations”, of the updating of the Convention for the Avoidance of Double Taxation between the Republic of Cyprus and the Russian Federation.
“The goal of both parties is to sign the Agreement by Autumn 2020, so that it will be implemented on January 1, 2021,” the statement said.
The Russian side, it is added, had assured the withdrawal of the termination procedures of the Convention. At the same time, it had assured that the same regulations will apply to other countries that maintain similar agreements from the same date that will apply to Cyprus, ie 1/1/2021.
The statement stressed that “maintaining the existing network of Double Taxation Agreements is a priority for the government, and therefore updating them in the face of changing international conditions is imperative”.
Russia’s Ministry of Finance also expressed its satisfaction on the deal:
“Additional revenues to the Russian budget from the increase in the tax on dividends by Cyprus will amount to 130-150 billion rubles annually,” Ministry of Finance of the Russian Federation. (source: cyprus mail)