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Russia Tightens Tax Screws on Super Wealthy

Jamie Dettmer

   Russian leader Vladimir Putin is tightening the tax screws on the
   country's super-rich.

   The Kremlin last week secured major changes to Russia's double-tax
   treaty with Cyprus, where last year oligarchs and Russian corporations
   deposited $25 billion in the island's banks, avoiding higher taxes in
   Russia.

   Russian finance officials had threatened to scrap the treaty
   altogether, triggering Cypriot authorities to agree to amendments that
   will see Moscow levy a new 15% tax on dividend payments that flow from
   Russian businesses to parent companies incorporated on the island.

   Interest payments and royalties will be taxed at 20%.

   Previously, Russian residents in Cyprus and Russian companies
   headquartered on the island faced only a 5% tax bill from the Cypriots.
   Now they will have to pay taxes to Russia, too.

   In its bid to tax Russian capital outflows to low-tax jurisdictions,
   the Kremlin also is targeting tax treaties with other popular tax
   havens, including Malta, Luxembourg, the Netherlands, Switzerland and
   Hong Kong. It is threatening to scrap the agreements altogether if they
   are not amended.

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