Russia terminates the tax agreement with Cyprus. Will the agreements with the Netherlands, the Malta and Luxembourg be changed?

03.08.2020

Russia terminates the tax agreement with Cyprus.


This step was taken as part of the implementation of the Russian President's decree on taxation of income in the form of dividends. Moscow's proposal to increase taxes for Russian residents of Cyprus to 15% did not meet the understanding of the authorities of Nicosia.


In spring, Russia notified Cyprus of changes to the tax agreement, after which negotiations were held.


In response to Moscow's offer to increase the current rates, Cyprus offered to keep them, while tightening control over foreign structures of Russian business. However, Moscow insists on raising them, threatening to denounce the current agreement in the autumn.


Russia suggested that the Netherlands review the current agreement on the avoidance of double taxation either.

Moscow has proposed raising the tax rate on dividends to a maximum of 15 percent. If the Netherlands does not agree to the proposal, Russia reserves the right to withdraw from the agreement unilaterally.


The Malta and Luxembourg received similar letters.

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