Off the list



An order of the Russian Ministry of Finance dated 21 August 2012 No. 115n, registered in the Ministry of Justice of the Russian Federation on 25 October 2012 No.25728 removing Cyprus from its so called “black list” has been published. The removal is effective as of 01 January 2013.

From the beginning of January 2013 Cyprus registered companies will benefit from the participation exemption introduced by Russia in 2008, under which dividends received by Russian companies from qualifying participations will be exempt from tax, provided that:

•    The recipient of the dividend holds at least 50% of the equity of the distributing subsidiary company and the participation confers the right to receive at least 50% of the dividend distributed;
•    The recipient of the dividend has held the investment for at least one year at the time the decision is made for distributing the dividend; and
•    The cost of the investment is RUR 500 million (about €13.5 million) or more.

Moreover, any transactions between Russian and Cyprus unrelated companies will no longer be subject to the automatic transfer pricing controls in Russia that applies to transactions with jurisdictions included in the so called "blacklist".