Today Evgenios Evgeniou, President of the Cyprus-Russian Business Association (CRBA), addressed the members of the association with an explanation of the information on the latest developments regarding the Double Taxation Treaty between Russia and Cyprus.

According to the expert, Cyprus has already received an official invitation from Russia to revise the terms of the treaty and it is preparing to give an official response by 15th of June. He noted that although the request for an increase in income tax to 15% on dividends and interest  is not a positive development, especially in the current COVID 19 crisis, the Cypriot government will do its utmost to achieve the best possible outcome. Evgenios Evgeniou emphasised the importance of maintaining the double taxation treaty with Russia in the interests of current and future investors in Cyprus. If Russia decides to exercise its right to terminate the Treaty for the Avoidance of Double Taxation, then the agreement may be terminated from 1 January 2021.

Today, according to the terms of the agreement, the tax on dividends paid by a Russian company to a Cyprus resident, legal or natural person, is 5%, if this resident / company has invested in the capital of a Russian company at least 100,000 euros, Evgenios Evgeniou reminded. In all other cases, the tax is 10%. The tax withheld on interest in Russia and paid to the resident of Cyprus is 0%.

According to the law of the Russian Federation, if there is no agreement on avoidance of double taxation between countries, the income tax on dividends paid by a Russian company to a foreign company is 15%, and income tax on interest is 20%.