Russia-Cyprus Double Tax Treaty to be amended
In Moscow, Cyprus and Russia signed an Agreement on the avoidance of double taxation, a new protocol will be signed in September.
As a result of this meeting, the process of unilateral termination of the treaty by the Russian Federation is terminated. The period of uncertainty following the April 1 request from the Russian Federation to amend the DTT between Cyprus and Russia has ended.
Effective January 1, 2021, the withholding tax on dividends and interest paid by Russia to Cyprus will increase to 15% with some exceptions for regulated entities and certain types of interest on corporate bonds, government bonds and Eurobonds.
There is reason to believe that similar letters of request for an increase in the rates of withholding tax on dividends and interest to 15% have been sent to Malta, Luxembourg and the Netherlands, and will also be sent to other countries. This practice creates the potential for a level playing field.
The Cypriot-Russian Business Association was represented as part of the official delegation at the meeting in Moscow and all this time participated in the negotiation processes.