Tax Control Over Off-shore Cyprus Companies To Be Tightened

The updated double taxation treaty between Russia and Cyprus contains a potentially dangerous new definition of "permanent representative of foreign companies."

According to the new treaty, an individual may be recognized as a permanent representative if this individual resides in Russia for 183 days and provides services producing profit exceeding 50% of business activity of Cyprus company. 

The new treaty is set to come into effect on January 1, 2011. It was originally signed by Russia and Cyprus on December 5, 1998.