Amendment of the Cyprus Russia Tax Treaty

An amendment on the agreement between Cyprus and Russia has been reached regarding the 1998 tax treaty.

The amended agreement has resulted after thorough negotiations between the Ministers of Finance of the two countries.

15% WHT on Income from Dividends and Interest

What has been agreed is that the current Withholding Tax (WHT) rates will increase to 15% on income from dividends and interest. The Cypriot side has secured certain exemptions from the aforementioned withholding tax described below.

● A 5% WHT applies should the recipient/beneficial owner of the dividends be:

    1. A regulated entity such as a pension fund or insurance undertaking;

    2. A listed company on a registered stock exchange (subject to conditions);

    3. The Government or a local authority;

    4. The Central Bank.

● A maximum of 5% WHT applies should the recipient/beneficial owner of the interest be a listed company on a registered stock exchange (subject to conditions).

● Nil WHT applies on income from interest from corporate bonds, government bonds and Eurobonds or should the beneficial owner be:

    1. An insurance undertaking or a pension fund;

    2. The Government or local authorities;

    3. The Central Bank or other banking institutions.

● Maintaining zero WHT on royalty payments is guaranteed.

The Cypriot side shall preserve the zero withholding tax rates on income from interest and dividends to non-residents of Cyprus as indicated by law.

Effective Date

After signing the protocol in Autumn 2020, the amended agreement shall be put into effect as of January 1st, 2021.

Malta and Luxembourg will also amend their DTT’s with Russia and increase tax rates to 15%, following the Cypriot agreement, while a negotiation process with the Netherlands is occurring. Our team of experts is at your disposal for further enquiries.

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