“Colleagues from Cyprus will be once again prompted to agree to amend the rates of withholding tax on interest and dividends to 15%, subject to some exemptions in relation to institutional investment”, – told reporters the state Secretary – Deputy Minister of Finance Alexey Sazanov.
the Talks will be held in Moscow in the beginning of next week – 10 and 11 August.
Earlier, the Finance Ministry, by order of the President of the Russian Federation, launched the procedure of denunciation of the agreement on avoidance of double taxation with Cyprus after launched on the initiative of Russia negotiations have stalled. It was assumed that the agreement will expire in 2021.
“during the negotiations, Cyprus has put forward its proposals, analyzing which the Ministry of Finance came to the conclusion that in fact they blur and make unattainable the Russian side estimated the impact of the measures taken to support the national economy and social programs, and contribute to a tax-free withdrawal from Russia through the Cyprus jurisdiction considerable financial resources of Russian origin”, – said the Ministry of Finance on 3 August.
under the current agreement rate when dividends are paid to Cyprus can be reduced to 5 or 10%, and the interest on the loans to 0%. It is more than two times less than the corresponding rate in Russia (13-15%). The Finance Ministry has proposed to colleagues in Cyprus to raise rates to 15% as dividend and interest.
the Department has sent similar proposals to change the double tax Treaty for Malta and Luxembourg, and recently – and the Netherlands.
“In respect of Malta and Luxembourg – both countries generally agreed on the proposed by the Russian side conditions, – has told carps. – Now there is no need of denunciation of double tax Treaty with Malta”.
According to him, the negotiations with Malta and Luxembourg will be completed promptly after completion of negotiations with Cyprus.
In March, President Vladimir Putin said that all payments of income, interest and dividends, stretching from Russia abroad in an offshore jurisdiction, should be subject to adequate tax – not less than 15 percent. He instructed to adjust the agreement for avoidance of double taxation with some countries, starting with those through which significant resources of Russian origin.