Russia expects tax hike on dividends for Cyprus to yield 130-150 bln rubles in budget revenues annually
MOSCOW. Aug 10 (Interfax) - Additional budget revenues from the revision of the tax agreement with Cyprus may be more than twice as substantial as revenues coming from another measure from the anti-coronavirus aid package announced by President Vladimir Putin in March - a progressive personal income tax on high incomes.
On Monday, Russia and Cyprus held talks to adjust the double taxation agreement. Cyprus agreed to Russia's terms regarding the increase in withholding tax to 15% on dividends and interest.
"All our proposals were supported. There were suggestions from our Cypriot colleagues to add investment funds to these exceptions [from the 15% tax, with bond issues and direct investment by public companies proposed earlier], as well as other similar instruments, but they were not supported by the Russian side, as this would reduce the additional income we expect to receive. Thus, only the Russian proposals were agreed upon," Russian State Secretary and Deputy Finance Minister Alexei Sazanov said in an interview with the Rossiya 24 television channel.
The updated agreement should enter into effect from January 1.
"We are expecting additional budget revenues from taxation of payments going to Cyprus beginning next year in the amount of 130-150 billion rubles annually," Sazanov said.
The progressive income tax (15% instead of the standard 13% for individual incomes exceeding 5 million rubles a year) is expected to generate around 60 billion rubles for the budget, according to estimates announced in March.