Insider Economy Moscow officially asks Nicosia to renegotiate double taxation treaty

Moscow officially asks Nicosia to renegotiate double taxation treaty

Moscow has officially informed Nicosia that the double taxation treaty between the two countries needs to be renegotiated, Phileleftheros reports.

The request from Russian Deputy Finance Minister Alexey Sazanov was sent on Wednesday to the Finance and Foreign ministries.

Ten days ago, President Vladimir Putin dropped a bomb on the business world saying all interest and dividend payments leaving Russia will incur a 15% tax.

And that all double taxation treaties will now have to be renegotiated, otherwise Russia will withdraw from them unilaterally.

This is yet another blow to the economy of Cyprus which is under a lockdown due to the coronavirus whose consequences are expected to be bleak.

Russia’s new measure which is expected to be permanent will have a strong impact on Cyprus where the minimum tax rate on dividends has been 5%.

The relevant ministries in Nicosia acknowledge the seriousness of the issue and are requesting meetings at the highest political and technocratic level even though they are aware that data from Moscow is hard to amend. And that the island’s services sector will be hit very hard.

The fact that Russians are moving fast to implement their proposals is a strong indication that they will be inflexible, an insider said.

In the presence of Putin, Russian Prime Minister Mikhail Mishustin confirmed on Wednesday the formal request to Cyprus had been sent.  And that they expect an agreement to be reached – at technocratic level at least – by April 24.

A response at the political level should reach Moscow by June 15, he added, reiterating that Russia will otherwise invoke the Vienna Treaty and unilaterally terminate the treaty.

Up until now, a 15% rate currently exists for dividends paid to jurisdictions with which Russia has no tax treaty.

By Antonis Antoniou

Read more:

 

Russia’s Putin drops a bomb on dividend payments

 

 

 

Top Stories

24-year-old who was speeding was deprived of driving license

On 3 January, a 24-year-old was stopped at the Larnaca-Kofinou road because he was driving at 207 kilometers. He was scheduled to appear before a...

Industrial area to be established next to the Nicosia Mall

The Environmental authority gave the green light for the establishment of a big industrial zone within the boundaries of the Lakatamia Municipality, in an...

COVID-19: Cyprus’s position compared to other countries

Approximately a year has gone by since the beginning of the COVID-19 pandemic. Since the end of 2019 the vaccination against the virus has...

Coronavirus or not, Cypriots and Greeks have sex at least twice a week

Coronavirus pandemic or not Cypriots and Greeks have sex at least twice a week on average, according to a latest on-line research study by...

Briton living in Paphos reports theft of watch, jewellery, perfumes

A British national who lives permanently in coastal Paphos has reported theft of goods in his apartment worth over €7,000, police said on Wednesday. No...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...