The Protocol to the Russia - Cyprus Double Tax Treaty has been signed on 8 September

Under the amended text of the tax treaty, effectively only public companies will benefit from the reduced 5% dividend WHT and zero WHT on interest. This obviously creates incentive for many groups to convert their Cyprus entities into such public companies.

The special consideration should be paid however to complying with the Principal Purpose Test under the MLI to benefit from the reduced tax rates. The Russian Ministry of Finance reported that similar amendments into the respective tax treaties have been agreed with Luxembourg and Malta, while negotiations with the Netherlands continue.

Read the full text of Roustam Vakhitov's comment on this topic.