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Protocol amending the Double Taxation Agreement with Cyprus

11 сентября 2020
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On September 2, 2020, the Government of the Russian Federation signed a protocol on amending the agreement on the avoidance of double taxation with Cyprus

According to the adopted protocol, the tax levied on dividends and interest should not exceed 15% of the total amount of dividends.

In some cases, dividend tax may be 5% if the recipient of the dividend is:

  • An insurance institution or pension fund;
  • A company whose shares are listed on a listed stock exchange, if at least 15% of the voting shares are in free float and which owns at least 15% of the capital of the company paying the dividend for 365 days, including the date of the dividend payment
  • Government, political division, local government
  • By the central bank.

In addition, interest tax is levied only in the country of residence of the person to whom interest is paid if:

1. The person beneficially entitled to interest is:

  • Insurance institution or pension fund;
  • Government, political division, local government;
  • The Central Bank;
  • Bank.

Or

2. Interest is paid in respect of the following securities that are listed on the stock exchange:

  • Government bonds:
  • Corporate bonds;
  • External bond loans (Eurobonds).

Moreover, if the actual recipient of the interest is a company whose shares are listed on the stock exchange and at least 15% of the voting shares are in free circulation, and which directly owns at least 15% of the capital of the company paying interest during a period of 365 days, then the tax on interest can be charged in both states, regardless of whether the person falls within the above exceptions, but should not be more than 5%.


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