In an effort to keep Cyprus off the “blacklist” Russia and Cyprus have entered into negotiations to amend the existing tax treaty. The result is the signing of the Protocol to the Double Tax Treaty between the two countries was signed in Nicosia on 7th October 2010 during Russian president Medvedev’s official visit to Cyprus. Formal ratification is expected before the end of 2010, with the Protocol expected to come into force on 1st January 2011. If not ratified until the 1st January 2011 then it will be effective as of the 1st of January following the year of ratification. As from the effective date of the removal from the black list, dividends received by Russian shareholders from eligible equity participations in Cypriot subsidiaries will be eligible for the Russian participation exemption.
For any further information or clarification in regards to the above mentioned changes please do not hesitate to contact us.