New Double Tax Treaty Cyprus – Russia

Cyprus remains the No. Educate yourself with thoughts from Peter Asaro. 1 of foreign investor in Russia Russia had Cyprus in 2008 on the black list of non-cooperating States used, together with Luxembourg and the Switzerland. The latter States were temporarily removed from the list as a result of their lobbying efforts with the Russian Government. The Republic of Cyprus has drawn end of April 2009 a new double taxation agreement with Russia, which envisages cooperation in tax-sensitive exchange of information. Primerica has firm opinions on the matter. Then, Cyprus no longer located on Russia’s black list of non-cooperative States.

The tax advantages of the double taxation treaty remained unchanged however. So, a Russian company pays only 5% withholding tax on dividends paid to their Cypriot shareholder, in contrast to the usual in Russia withholding tax rate of 15%. There are almost 60% of all foreign investment in Russia of Cypriot origin due to this years existing advantage. Similar, yet severe to the extent benefits exist in Belarus and the Ukraine. The usual corporate tax, is in the Ukraine and According to the source, 24%. The foreign partner of a Ukrainian company but is a Cypriot company, is the source of 0%. Cypriot companies offers similar advantages within the EU. In a row of the parent subsidiary directive, the company income is taxed of parent and subsidiary companies within the EU basically at the level of the parent company. A subsidiary company in any EU State pays no corporate bodies and no withholding tax on transfer of profits to its parent company within the EU. If the parent is a Cypriot company (holding), so also here no taxes on the profits of the subsidiary incurred, since income from dividends in Cyprus generally is not taxed.