Cyprus Removed From Russia’s “Black List”

Cyprus Removed From Russia’s Ministry Of Finance Notorious “Black List”

With effect from 1 January 2013 Cyprus will be removed from the Russian tax “Black list” (List of the States and Territories providing preferential tax treatment and / or not requiring disclosure and furnishing of the information upon conducting of financial transactions).

The removal of Cyprus from the Russian “Black list” has a great  meaning for Cyprus. The use of the tax beneficial Cypriot legal entities for the purpose of investing and paying dividends back into Russia can now occur without any obstacles. Zero corporate profits tax rate would apply to dividends received in Russia from Cypriot companies and this will enhance the appeal of Cyprus as one of the most attractive jurisdictions for Russian investment.

In effect:

 

From 1 January 2013, dividends paid from Cyprus companies to Russian companies will be exempt from 

taxation in Russia provided that:

 

  • The recipient holds at least half the equity of the distributing entity and the participation confers the right to receive at least half of the dividend distributed;

 

• The recipient has held the investment for at least one year at the time the decision is made to distribute the dividend; and

• The cost of the investment is RUR 500 million (approximately €13.6 million) or more.

 

  • The transactions between unrelated Russian and Cyprus companies will not be subject to the onerous transfer pricing provisions introduced with effect from 1 January 2013 that will apply  to countries on the “Black list”. 
For further information and/or clarification on the topic please feel free to contact Mr. Martinos Typographos
TYPOGRAPHOS & CO LAWYERS
Mitsis Building no.3, 1-7 Makarios Ave.,
Suite 309-310, Nicosia, 1065 Cyprus
T +357 22 755 648
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