Representatives from the governments of Russia and Cyprus on 10 August 2020 reached a compromise in their negotiations for a new Protocol to amend the existing income tax treaty between the countries.
The Protocol negotiations followed a March 2020 letter from the Russian Ministry of Finance to the Ministry of Finance of Cyprus proposing to revise certain income tax treaty provisions. An intent of the Protocol would be to amend the withholding tax rates on dividends and interest payments and would reflect “limitation on benefit” measures. Specifically, in a draft Protocol, it was proposed that dividends and interest be subject to tax in the country that is the source of the income at a rate not exceeding 15%. No option for applying lower tax rates was provided.
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