On 8 September 2020, Cyprus & Russia signed the protocol for the amendment of the Treaty for Avoidance of Double Taxation between the two countries.
The amending protocol increases the withholding tax on dividends and interest income to a maximum of 15% while excluding from the said withholding tax certain regulated entities (i.e. pension funds, insurance companies and listed entities with specific characteristics) and interest payments from corporate bonds, government bonds as well as Eurobonds.
The amendments will come into force on 1 January 2021.
It is worth noting that the aforesaid increases do not create adverse tax implications on Cyprus tax resident entities paying interest and distributing dividends to Russian entities, as Cyprus does not impose withholding tax on dividend distribution and interest payments to non-Cyprus tax resident companies.
Our firm's tax department is available to assist you should you have any queries on the above.
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