Saturday, 18 April 2009Russia and Cyprus have signed a new double taxation avoidance agreement which should finally secure Cyprus's removal from the notorious Russian 'blacklist' of jurisdictions which have not demonstrated a sufficient level of cooperation with the Russian tax authorities.
Cypriot Finance Minister Charilaos Stavrakis said the in-principle agreement was "very significant and beneficial" for both countries, as it will remove double taxation on assets and business activities for both individuals and companies.
According to figures, Russia is one of Cyprus' biggest trading partners. Ministry officials estimate Russian deposits in Cypriot banks to exceed euro20 billion ($26.35 billion). Russia had blacklisted the country in early 2008 on claims that it was not cooperating enough in exchanging information on those vast bank assets, leading to tax evasion.
Those advantages include "very low and competitive" taxes on Russian investments abroad and foreign investments in Russia, Stavrakis said. Russian finance ministry official Ilya Trunin said Cyprus will be dropped from the black list once the agreement comes into effect.
Last year, Russia added Cyprus to a 'blacklist' of 54 countries, on the grounds that it was an "uncooperative territory'. This blacklist was part of an amendment to the Russian tax code which introduced a tax exemption on the repatriation of dividends from foreign subsidiaries of Russian companies under certain circumstances. Russian subsidiaries based in territories and countries on the so-called blacklist were not included in the exemption.
by Simge Soyer, JTW
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Saturday, 18 April 2009
Journal of Turkish Weekly
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