Russia sours on Cyprus tax treaty
RUSSIA SOURS ON CYPRUS TAX TREATY . . . Foreign investment into Russia is often routed through Cyprus as a way of reducing withholding taxes on interest and dividends at the Russian border. The Russia-Cyprus treaty reduces these taxes to 0%.
The Russian government has reportedly prepared draft legislation that would unilaterally renounce the treaty. The government should have given Cyprus notice by July 1 this year if it intended to renounce during 1998. This suggests the treaty will remain in effect at least until next year.