Important News from Cyprus and Malta
Contributed by Fiducenter (Cyprus) Ltd
27 August, 2013
Contributed by Fiducenter (Cyprus) Ltd [www.fiducenter.com.cy]
Double Tax Treaty between Cyprus and Russia – Clarification on the tax treatment applicable to contractual penalties
On 14 August 2013, the Russian Ministry of Finance (MoF) published Letter No. 03-08-05/30018 issued on 29 July 2013 clarifying the application of the provision of the Double Tax Treaty (DTT) between Cyprus and Russia of 1998 with regards to contractual penalties paid by a Russian legal entity to a Cyprus legal entity.
As per the Russian Tax Code foreign legal entities that operate in Russia through a permanent establishment or that derive taxable income from Russian sources are subject to Russian Corporate Tax.
As last reported on 20 February 2013 Cyprus was removed from Spanish list of tax havens and a Double Tax Treaty (DTT) between Cyprus and Spain was signed on 14 February 2013. This DTT was approved by Spanish Council of Ministers on 2 August 2013. The DTT is still pending ratification by the Government of Cyprus. It will enter into force three months after it is ratified by the Government of Cyprus and for taxes on income and capital it will become effective at the beginning of the year following the date the treaty enters into force.
As last reported on 4 July 2013 a Double Tax Treaty (DTT) was signed between Cyprus and Portugal. The DTT was ratified by Portugal on 21 June 2013 and it will enter into force on 16 August 2013. It will, in general, apply as from 1 January 2014.
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