Cyprus has been removed from Russia’s“black list” of 54 countries that previously had not cooperated with Russian tax authorities.
In April 2009, Cyprus and Russia agreed to review and renew the double taxation agreement but the Russian government avoided revealing its intentions regarding the time of implementation of the agreement.
Russia is among the largest foreign investors in Cyprus, with an investment of €2 billion in 2008. In 2008, $34 billion was invested in Russia via Cyprus, while Cypriot investment in the country, the worlds largest by area, was €1.5 billion.
The double tax agreement is therefore also likely to also benefit Russia. The country, which experienced a large outflow of capital after the collapse of the Soviet Union in the early 1990’s, is benefiting from investment flows from Cyprus. Cyprus has the lowest corporate tax rate in the EU, at just 10 per cent.
Apart from the protocol on double taxation, Cyprus and Russia will sign a series of other agreements, which will lend a new dynamism between the two countries.
16 agreements and protocols concern the economy, tourism, bank cooperation, science and education, transport and justice “which will give new dynamism to the wide range of political and financial activities of the Cyprus-Russian cooperation,”
Among others, the two countries will today sign a memorandum of understanding between the Cypriot foreign ministry and the Russian diplomatic academy, a joint action plan on tourism, cooperation between the countries’ stock exchanges, cooperation between trade and industry chambers, agreement on transport and health.
Cypriot entrepreneurs will be able to broaden their business activities and cooperation with businesses and organizations of the Russian Federation,” OEV said.