The business proposed to consolidate the benefits from the agreement with Cyprus in the Tax Code

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The agreement with Cyprus for the avoidance of double taxation (DTT) was proposed to be made, in fact, universal. The Russian Federation last year re-signed an agreement with the republic on new terms, and now the RUIE decided to apply to the government with a request to consolidate in the Tax Code (TC) the benefits for capital withdrawal prescribed in this DTT, sources familiar with the union’s letter told Izvestia.

Such a measure is required to mitigate the consequences of the breakdown of the tax agreement with the Netherlands for a business with Russian roots registered in the kingdom.

The Ministry of Finance of the Russian Federation proposed to Amsterdam to revise the DTT in August last year – on conditions similar to the agreements already concluded with Cyprus, Malta and Luxembourg. According to these “basic” agreements, if a foreign resident owns at least 15% in a Russian company for at least one year and is a public company whose shares are quoted on the stock exchange, then he pays 5%, not 15%.

In addition, a number of preferences, up to full tax exemption in the country of the source of income, are provided for bond issuers, government agencies and banks. In all other cases, the rate on the withdrawal of capital in one form or another is at least 15%.

Read more in the exclusive material from Izvestia:

From private traders to general: they want to include benefits from the agreement with Cyprus in the Tax Code