Officially
Cyprus has not excluded from the “black list” of the Ministry of Finance but
Russian businessmen have already started to think about the consequences of such changes.
Remind that in accordance with the Order or Ministry of Finance of
Russia dated 21.08.2012 #115n
Cyprus will be removed from the “black list” (a list of countries and territories which offer preferential tax treatment and (or) do not provide the disclosure of information about
financial transactions (offshore areas)). The official date of the exclusion
Cyprus from the list will be January 1, 2013 when the Order will come into force.
Such decision was made by the Ministry of Finance of
Russia in connection with the signing of the Additional Resolution to the DTA between Government of
Russian Federation and the Government of
Cyprus concerning income and capital taxes. The Additional Resolution forces into application an important provision about tax information exchange and mutual assistance of tax collection. These actions bring the two countries closer to international standards of economic cooperation and offer new opportunities for investment.
«The consequences of changes of the Additional Resolution to the DTA between Government of
Russian Federation and the Government of
Cyprus we can estimate only over some time.
One of the obvious changes at the moment is a change of “Black list” of the Ministry of Finance (the Order of the
Russian Finance Ministry of 21.08.2012 № 115n).
But I want to draw your attention to the following changes: now
Russian companies will receive dividends from
Cyprus subsidiaries rated 0% tax (Item 3 of Art. 284 of the
Russian Tax Code) instead of 9% that was before.
Even this single fact creates extremely favorable conditions for the entry funds of
Cyprus companies to
Russia.
Accordingly, I can forecast an increase of number of
Cyprus companies with official
Russian residents as shareholders.
Business with
Cyprus becoming safer: the official possession of Cypriot companies no longer need to use everywhere nominee directors and nominee shareholders.
Well, and because it is profitable to open Cypriot subsidiaries and it is safe to take these assets on the balance sheet cash traffic between
Cyprus and
Russia will only intensify.
Changes to the DTA between the Government of the
Russian Federation and the Government of the Republic of
Cyprus have given great tools to conduct a clean and legitimate tax planning with the simultaneous use of the advantages traditionally loyal and low-tax legislation of
Cyprus».
Yaroslav Lomakin ( Managing partner Company Honest & Bright)