On the 29th of December 2016 the Ministry of Finance announced that an agreement has been reached between Cyprus and Russia for the suspension of the application of the Protocol that was signed on the 7th of October 2010 which amends Article 13 of the Agreement for the Avoidance of Double Taxation regarding the income tax and tax on capital which was signed between the Republic of Cyprus and the Russian Federation on the 5th of December 1998.

According to the Protocol of the 7th of October 2010, Article 13 would be amended and by virtue of that amendment, profits that would be acquired by a citizen or a registered company in the Republic of Cyprus, from the alienation of shares which derive more than 50% of the their value from immovable property that is located in Russia, would be taxed in Russia.

The Ministry of Finance with its announcement on the 29th of December 2016 stated also that it intends to prepare a supplemental Protocol with which the revised provisions of Article 13 of the above Agreement would be suspended until the introduction of uniform provisions in other bilateral Agreements for the Avoidance of Double Taxation with other European countries.

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