Cyprus wants Russia to remove it from tax blacklist

25/11/2008

The President of Cyprus is expected to appeal to his Russian counterpart Dmitry Medvedev to remove his country from Russia's tax "blacklist" of 41 countries.

Cyprus and the other 40 countries were put on a blacklist in January as a result of an overhaul of Russia's regulations regarding companies repatriating their dividends tax-free.

Cyprus President Demetris Christofias is in Moscow this week to sign several "very important" agreements to help foster friendly relations between the two countries. The most significant agreement is the memorandum of understanding between the Federal Service for Financial Markets and the Cyprus Securities and Exchange Commission.

Since the early 1990s, Cyprus has attracted Russian companies and individuals seeking to capitalise on the double taxation treaty. This treaty prevents earnings from being taxed in both countries and also manifests itself in more relaxed business regulation.

Finance Minister Charilaos Stavrakis said: "Cyprus remains one of the biggest sources of foreign direct investment for Russia, therefore its role as a friendly financial centre and a member of the EU would top the agenda for a Christofias-Medvedev meeting."