Russia withdraws from agreement on avoidance of double taxation with Cyprus, Belarus remains
<p> MINSK, Aug 6 - PrimePress. Russia has started the procedure to cancel the agreement on avoidance of double taxation with Cyprus; Belarus’ agreement on avoidance of double taxation with Cyprus remains in force, reads a comment by Arzinger & Partners law firm. </p> <p> </p> <p> The company experts assume that if Russia withdraws from the agreement by Russia, it is possible that by autumn Russian companies may face additional tax burden when transferring dividends, royalties and other types of income to the Cypriot beneficiaries of international holding structures. </p> <p> </p> <p> Since the possible consequences of such a decision may affect a lot of Russian companies and their owners, the commentary emphasizes that there is a double taxation treaty between Belarus and Cyprus. </p> <p> </p> <p> “The agreement provides for preferential tax rates or excludes withholding tax on the main categories of income typical of international commercial relations, while with regard to other income - allows to set off paid taxes in the country of its registration,” the commentary says. </p> <p> </p> <p> For instance, zero-percent tax rate applies to the payment of income received in Belarus to Cyprus, if commercial activity is not carried out through a permanent representative office. </p> <p> </p> <p> With regard to dividends, the rate of 5% applies if the recipient has invested at least €200 thousand in the authorized capital of the company paying the dividends; the rate of 10% if the recipient owns at least 25% stake in the authorized capital of the company paying the dividends, and 12% - in other cases. </p> <p> </p> <p> Interest on the various debt obligations is 5% if the recipient is the actual owner of income, 10% in other cases. </p> <p> </p> <p> The royalty is 5% if the recipient is the actual owner of income, 15% - in other cases. End </p>
2020-08-07
Primepress
MINSK, Aug 6 - PrimePress. Russia has started the procedure to cancel the agreement on avoidance of double taxation with Cyprus; Belarus’ agreement on avoidance of double taxation with Cyprus remains in force, reads a comment by Arzinger & Partners law firm.
The company experts assume that if Russia withdraws from the agreement by Russia, it is possible that by autumn Russian companies may face additional tax burden when transferring dividends, royalties and other types of income to the Cypriot beneficiaries of international holding structures.
Since the possible consequences of such a decision may affect a lot of Russian companies and their owners, the commentary emphasizes that there is a double taxation treaty between Belarus and Cyprus.
“The agreement provides for preferential tax rates or excludes withholding tax on the main categories of income typical of international commercial relations, while with regard to other income - allows to set off paid taxes in the country of its registration,” the commentary says.
For instance, zero-percent tax rate applies to the payment of income received in Belarus to Cyprus, if commercial activity is not carried out through a permanent representative office.
With regard to dividends, the rate of 5% applies if the recipient has invested at least €200 thousand in the authorized capital of the company paying the dividends; the rate of 10% if the recipient owns at least 25% stake in the authorized capital of the company paying the dividends, and 12% - in other cases.
Interest on the various debt obligations is 5% if the recipient is the actual owner of income, 10% in other cases.
The royalty is 5% if the recipient is the actual owner of income, 15% - in other cases. End