On December 29, 2016 the Cypriot Ministry of Finance issued an announcement stating that the Russian and Cypriot authorities have reached an agreement for postponing the application of Article VII of the Protocol amending 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 October 7, 2010.

 

In the announcement it is furthermore stated that in parallel, an additional Protocol is being finalised, providing for the application of the revised provisions of Article 13 of the said Agreement, until similar provisions are introduced in other bilateral Agreements for the Avoidance of Double Taxation between the Russian Federation and other European countries.

 

Article VII of the Protocol arranges that the existing Paragraph 4 of Article 13 will be deleted  and the following Paragraphs will be added to Article 13 of the DTA:

4.  Gains derived by a resident of a Contracting State from the alienation of shares or similar rights deriving more than 50% of their value from immovable property situated in the other Contracting State may be taxed that in other State.

 

5.   For the purposes of paragraph 4, gains from the alienation of shares shall not include gains from the alienation of shares in the course of a corporate reorganisation, and gains from the alienation of shares listed on a registered stock exchange.

 

6.   The provisions: of paragraph 4 shall not apply to gains from the alienation of shares derived by a pension fund, a provident fund and the Government of a Contracting State.

 

7.   Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident.

 

Article XII of the Protocol arranges that Article VII shall have effect on the first day of January of the calendar year following the expiration of a period of four years from the date on which the Protocol enters into force. Based on an overview of DTAs and Protocols the Protocol amending the Russian - Cypriot DTA entered into force on April 2, 2012.

 

Click here to be forwarded to the announcement of December 29, 2016 as published on the website of the Cypriot Ministry of finance, which will open in a new window.

 

Click here to be forwarded to the Protocol to Amend 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 of 5th December, 1998 as available on the website of the Cypriot Ministry of Finance, which will open in a new window.

 

Click here to be forwarded to 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 as signed on December 5, 1998 as available on the website of the Cypriot Ministry of Finance, which will open in a new window.

 


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