“the Cypriot delegation fully agreed with the Russian side, – said Deputy Prime Minister Alexei Overchuk, who participated in the negotiations. We initialed a draft Protocol to be signed in September 2020.”

the Talks were held in Moscow after July, have stalled. In early August, the Finance Ministry has launched a procedure of recovery from a double tax Treaty with Cyprus. “As of today took place the initialing of the Protocol, we stop the process of denunciation of the agreement,” – said the state Secretary – Deputy Minister of Finance Alexey Sazanov. He said that Cyprus will once again be asked to agree to amend the rates of withholding tax on interest and dividends to the level of 15% subject to certain exemptions in respect of institutional investment.

the Delegation of Cyprus on the negotiations in Moscow was headed by the Finance Minister Konstantinos Petridis. The ratification of the Protocol should take place before the end of 2020 will enter into force on 1 January 2021.

“In the coming months we also plan to conclude negotiations with Luxembourg and Malta on the same terms that we have offered to Cyprus,” said carp.

Russia Also is awaiting a formal response from the Netherlands. If they agree to negotiate, then they will be offered the same conditions as Cyprus.

the Finance Ministry notified the Ministry of Finance of Cyprus, Luxembourg, Malta and the Netherlands the intention to raise the rates of withholding tax on income from dividends and interest transferred from Russia to 15%. This requires to revise the double tax Treaty with these countries. In March, President Vladimir Putin said that all payments of income, interest and dividends, stretching from Russia in an offshore jurisdiction, should be taxed at a rate of not less than 15% (as charged to natural persons – non-residents in Russia).

the Existing tax Treaty with Cyprus provides a very attractive environment from the point of view of taxation. Rate dividends paid to Cyprus can be reduced to 5 or 10%, and the interest on the loans to 0%.