On Monday, August 10, Russia and Cyprus agreed on a new tax agreement against double taxation, amending the agreement concluded more than twenty years ago.
The Russian-Cypriot tax treaty, which came into force in 1998, allows wealthy Russian citizens living on a Mediterranean island, in particular, to pay tax on dividends at the rate applicable in their adopted country (5%), which is more beneficial than in Russia (15%). If the new agreement is ratified (by the end of 2020), the tax rate will be revised upwards.
Indeed, faced with an economic crisis combining a slowdown in activity due to the coronavirus and a collapse in oil prices, Moscow is looking for new sources of income. "The payment of profits to offshore accounts is extremely common and represents a significant deficit for the Russian state," said Mikhail Begunov, managing partner of Tax Compliance law firm.
You can view the full article in Le Courrier de Russie.