Changes to the Cyprus - Russian double taxation treaty

Negotiations to the Cyprus and Russian double taxation treaty have taken place following the request from Russia for an increase in the withholding tax on income from dividends and interest to 15% (currently the treaty provides for withholding tax of either 5% or 10% on dividends, and 0% on interest) 

It was finally agreed that - 

  1. Certain types of regulated entities would be exempt from the 15% withholding tax on dividends, such as pension funds, insurance companies, as well as listed entities with specific characteristics.
  2. Interest payments from corporate bonds, government bonds and Eurobonds will be excluded from the 15% withholding tax
  3. The exemption from withholding tax on royalty payments will continue to apply

It is expected that the revised treaty will be signed soon and will apply as from 1 January 2021.

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