The Ministry of Finance of the Russian Federation has recently announced that Cyprus will officially be removed from its “Black List” as from the 1st of January 2013.

This is great news for Cyprus, especially for both inbound and outbound investments to and from Russia!

The main positive implications of the above are as follows:

  • Dividends paid from Cyprus companies to Russian companies will be exempt from taxation in Russia subject to certain conditions (no Cyprus withholding tax upon the payment of such a dividend)
  • Transactions between Cyprus companies and Russian companies will be subject to the standard Russian transfer pricing regulations
  • Any other Russia provisions that apply on transactions with companies residing in “Black List” jurisdictions will not apply to transactions with Cyprus companies.

Needless to say that our tax team is available to advice you on the above issues and ensure that you are in compliance with the aforementioned requirements.