double tax treaty change

Cyprus, Russia Defer Key Double Tax Treaty Change

Russia and Cyprus have agreed to postpone a change to how capital gains from shares in Russian companies with substantial immovable property portfolios are taxed.

A change to the territory’s bilateral double tax agreement was proposed to be in place this year, to tax capital gains at source.

Previously the two countries signed a Protocol to amend Article 13 (capital gains tax) of the treaty. This was intended to ensure that shares in Russian companies that appreciate in line with property holdings outside Cyprus are not subject to double non taxation, as currently Cyprus only subjects Cypriot property to capital gains tax under their double tax treaty.

The Protocol’s entry into force has been deferred pending similar provisions being introduced into Russia’s double taxation treaties with other European countries.