Postponement of the provisions of the Protocol amending Article 13

On 29 December 2016, the Cypriot Ministry of Finance issued a press release announcing that an agreement has been reached between the Russian and Cypriot Tax Authorities for postponing the application of the Protocol that amends Article 13 of the Agreement between the Government of the Republic of Cyprus and the Government of the Russian Federation for the Avoidance of Double Taxation, with respect to taxes on income and on capital, which was signed on 7 October 2010.

The amendment to Article 13 provides for the taxation of capital gains from the sale of shares of companies deriving more than 50% of their value from immovable property, in the country where the immovable property is situated.

Furthermore, the Cypriot Ministry of Finance also announced that an additional Protocol is in the process of being finalised, providing for the application of the revised provisions of Article 13 to be deferred until similar provisions are introduced in other bilateral Agreements for the Avoidance of Double Taxation, between the Russian Federation and other European countries.