Nicosia – September 8th, 2020

The Protocol amending the Agreement for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital between the Government of the Republic of Cyprus and the Russian Federation was signed today, September 8, 2020, during the official visit of the Russian Minister of Foreign Affairs, Mr. Sergey Lavrov, in Nicosia. The amending Protocol was signed on behalf of the Republic of Cyprus by the Minister of Finance Mr. Constantinos Petrides and on behalf of the Russian Federation it was signed by the Deputy Minister of Finance of the Russian Federation Mr. Alexey Sazanov.

Following a request from the Russian authorities, for the amendment of the Interest and Dividends Articles of the existing Double Taxation Agreement, the Cyprus authorities have duly worked on the finalization of the agreed Protocol. The text as it was negotiated was finalized last August, after four rounds of negotiations, during the visit to Moscow of a Cyprus delegation headed by Mr. Constantinos Petrides, Minister of Finance of the Republic of Cyprus.

The signed Protocol increases the withholding tax on dividends and interest income to 15% respectively, while excluding from the said withholding tax income on interest and dividends certain regulated entities, such as pension funds and insurance companies, as well as listed entities with specific characteristics. Additionally, exemption from the said withholding tax applies for interest payments from corporate bonds, government bonds and Eurobonds.

It is worth noting that the conclusion of the Protocol ensures the implementation of the existing Agreement, which is undoubtedly beneficial for both countries, on investment and trade and at the same time economic and political cooperation is encouraged and strengthened between the two States.

Maintaining the existing network of Double Taxation Agreements is a priority for the Government, and therefore updating them in the face of changing international conditions is imperative.