{"id":26850,"date":"2020-08-04T17:33:03","date_gmt":"2020-08-04T14:33:03","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=26850"},"modified":"2025-08-26T17:02:41","modified_gmt":"2025-08-26T14:02:41","slug":"experts-termination-of-cyprus-tax-treaty-will-not-affect-the-crypto-industry","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/experts-termination-of-cyprus-tax-treaty-will-not-affect-the-crypto-industry\/","title":{"rendered":"Experts: Termination of Cyprus tax treaty will not affect the crypto industry"},"content":{"rendered":"

From August 3, the Russian Ministry of Finance <\/span>began<\/span><\/a> the process of terminating the agreement with Cyprus on the avoidance of double taxation.<\/span><\/p>\n

In March, President Vladimir Putin <\/span>proposed<\/span><\/a> scrapping the preferential tax rates \u201cfor those who bring their income as dividends to overseas accounts.\u201d<\/span><\/p>\n

In April, Russia sent the Cypriot authorities a proposal to raise the tax rate on dividends and deposit interest to 15%.<\/span><\/p>\n

Cyprus put forward its terms. The Ministry of Finance did not specify what they were; however, it said that they would \u201cblur and render unattainable the expected effect of the measures designed to support the national economy and social programs.\u201d<\/span><\/p>\n

The ministry also noted that the terms proposed by Cyprus would facilitate \u201ca tax-free outflow from the Russian Federation through the Cyprus jurisdiction of substantial financial resources of Russian origin.\u201d<\/span><\/p>\n

That the sides would not reach an agreement was expected, said Yuri Brisov, a member of the Commission on Legal Support for the Digital Economy of the Moscow Branch of the Association of Lawyers of Russia.<\/span><\/p>\n

\n

\u00abTherefore most Russian companies that have specifically structured their tax chains taking Cyprus into account have already considered or moved to other jurisdictions,\u201d he said.<\/span><\/p>\n<\/blockquote>\n

According to Anton Kravchenko, CEO of Xena Financial Systems, the termination of the Cyprus tax treaty will not affect crypto-industry participants:<\/span><\/p>\n

\n

\u00abCyprus is not a key jurisdiction for the cryptocurrency market. There are no large exchanges in Cyprus, nor groups of companies with a primary focus on cryptocurrencies.\u201d<\/span><\/p>\n<\/blockquote>\n

<\/span><\/p>\n

Dmitry Machihin, CEO of Pay Super, also agrees.<\/span><\/p>\n

\n

\u00abCyprus does not grant cryptocurrencies an official status. The companies operating there are mainly registered as funds and use cryptocurrencies as one of the asset classes,\u201d he said.<\/span><\/p>\n<\/blockquote>\n

Yuri Brisov also noted that there are not many cryptocurrency and blockchain projects with Russian participation in Cyprus.<\/span><\/p>\n

\n

\u00abSwitzerland, Liechtenstein, Estonia, Malta are much more popular in this regard,\u201d he said.<\/span><\/p>\n<\/blockquote>\n

Other experts noted that cryptocurrency companies are not part of the Cyprus double taxation avoidance agreement, under which the denouncement process has begun.<\/span><\/p>\n

Overall, breaking the agreement would negatively affect doing business with Cyprus and could push toward other jurisdictions because of double-taxation risks, according to Antonina Levashanko, head of the OECD standards competence and analysis center at RANEPA under the President of the Russian Federation.<\/span><\/p>\n

Senior tax-practice lawyer at Bryan Cave Leighton Paisner LLP and Moscow Digital School lecturer Dmitry Kirillov stressed that as long as a final point in the Russia-Cyprus negotiations has not been reached \u2014 on August 3 the Cyprus Ministry of Finance stated<\/span><\/a> that the final round of negotiations on this issue is scheduled for 10-11 August.<\/span><\/p>\n

\n

\u00abIn any case, owners of cryptocurrency and other businesses operating through Cypriot companies will have to consider restructuring their setups and diverting financial flows to more attractive jurisdictions,\u00bb Kirillov concluded.<\/span><\/p>\n<\/blockquote>\n

Subscribe to ForkLog news on Telegram: ForkLog Feed<\/a> \u2014 the full news feed, ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"

From August 3, the Russian Ministry of Finance began the process of terminating the Cyprus tax treaty on the avoidance of double taxation.<\/p>\n","protected":false},"author":1,"featured_media":26216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1862,27],"class_list":["post-26850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-cyprus","tag-russia"],"aioseo_notices":[],"amp_enabled":true,"views":"16","promo_type":"1","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/26850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=26850"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/26850\/revisions"}],"predecessor-version":[{"id":26851,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/26850\/revisions\/26851"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/26216"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=26850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=26850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=26850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}