Publications / 1.09.2020

Cream of the crop: who will receive benefits under the tax treaty with Cyprus / Izvestia.Ru

A number of Russian companies will be able to take advantage of tax relief when transferring dividends to their shareholders in Cyprus. This follows from the new Double Taxation Avoidance Agreement (DTAA) with the Republic of Cyprus. In particular, QIWI, Global Ports, Global Trans, Rusagro, Tinkoff and HeadHunter will be able, in theory, to qualify for a rate of no more than 5%, depending on how the Ministry of Finance and tax administration interpret certain points of the document. Exceptions are provided for companies that have entered a particular stock exchange through the Cyprus jurisdiction; all others must pay 15%. If the Russian Federation enters into agreements with other popular tax havens similar to the agreement with the Republic of Cyprus, then Yandex, OK, Evraz and the X5 group (Pyaterochka retail chain) will be able to get the benefit, experts say.

Andrei Gusev, Managing Partner at Borenius Russia, shared his point of view with Izvestia newspaper on the reasons for the exceptions made in the new DTAA.

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