The Russian Ministry of Finance has started the procedure for denouncing the tax agreement with Cyprus. This is necessary to avoid double taxation.
Russia and Cyprus have held talks on changing the agreement in terms of increasing the withholding tax to 15% for dividends and interest. The Ministry of Finance has studied the proposals of the Cypriot colleagues and decided that вЂњthey blur and make unattainable the expected effect of the Russian side of the measures taken to support the national economy and social programs.вЂќ
The Ministry of Finance noted that in addition, the proposals of Cyprus will facilitate the tax-free withdrawal of financial resources from Russia through the Cypriot jurisdiction.
вЂњTaking into account the close economic and historical ties between the two States, the Russian side formulated options for a compromise solution to this issue and offered to hold face-to-face talks in Cyprus within this week in order to reach a solution, but was refused,вЂќ the Ministry said.
In turn, the Ministry of Finance of Cyprus assured that they have not yet received decisions on the denunciation of the agreement. According to the Agency, such a step may lead to negative results.