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

Russia terminates the tax agreement with Cyprus.

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

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

In response to Moscow’s proposal to raise the current rates, Cyprus offered to keep them, while at the same time tightening control over foreign structures of Russian business. However, Moscow insists on raising them, threatening to denounce the current agreement in the fall.

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

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

Similar letters were received by the Malta and Luxembourg.