‘The Finance Ministry has prepared a bill allowing the state to lift banking secrecy for foreigners in an effort to get Cyprus off a Russian tax blacklist.’

‘Analysts have warned that failure to get off the list could harm the island’s flourishing financial services sector. Last year, Russia passed a bill exempting subsidiary companies based abroad from paying taxes on dividends sent back to the parent company in Russia. However, if the subsidiary was in a country placed on a blacklist, then the exemption did not apply.’

 ’Around 60 countries, including Cyprus and its competitors for foreign investment, were originally on the list. While its competitors eventually got off the list, Cyprus remained there.’

Since the Russian law has come into effect it has exposed Cyprus-based susidiaries to the tax. Financial analysts say Cyprus could soon lose its competitive edge over other countries if it stays on the list.

The Finance Ministry proposed a legal bill that would allow the authorities to look at the bank accounts of foreigners suspected of illegal activities.

‘The bill only applies to foreign residents who pay taxes abroad, and in countries that Cyprus has a double taxation agreement with.’

The bill gives Russia the chance to persuade Cypriot officials to investigate the banking accounts of Russian citizens suspected of various financial crimes.

Bill to get Cyprus Off Russia’s Tax Blacklist