Cyprus and Russia Reached Agreement on the Protocol Amending the Existing Double Tax Treaty

Following the announcements of the Russian Government in March 2020 (for further information please review our previous article here ), on September 8 2020 Cyprus and Russia signed a protocol amending the existing Double Tax Treaty between the two countries.

The protocol to the treaty is expected to come into effect on January 1 2021 once it is ratified by both countries. 

The protocol introduced the following amendments on withholding taxes.

Dividends:

1. Increased to 15% if the recipient is the beneficial owner of the dividend income;
2. Reduced to 5%  if the beneficial owner of the dividends is a company:

-listed on a registered stock exchange (subject to conditions),

-a pension fund or an insurance company;

– government agency, Central Bank, or a local authority.

Interest:

1. Increased to 15% if the recipient is the beneficial owner of the interest income;
2. 5% if the beneficial owner is a company listed on a registered stock exchange (subject to conditions);
3. 0% for income from interests on bank loans, government and corporate bonds, and Eurobonds.

The withholding tax on royalties remained at 0%.

It has been reported and announced that the Russian Government is seeking to renegotiate its double tax treaties with other jurisdictions such as The Netherlands, Malta, etc. with similar provisions to the abovementioned.

For further information and clarifications please contact us via email at info@zambartaslegal.com or via telephone +357 22262108