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. Last Updated: 07/27/2016

Cyprus, Russia Sign Double Taxation Agreement

Cyprus and Russia signed a double taxation agreement on Thursday that officials said will remove the east Mediterranean island from a Russian taxation "blacklist."

Cypriot Finance Minister Charilaos Stavrakis said the in-principle agreement was "very significant and beneficial" for both countries, as it will remove double taxation on assets and business activities for both individuals and companies.

Russia is one of Cyprus' biggest trading partners. Ministry officials estimate Russian deposits in Cypriot banks to exceed 20 billion euros ($26.35 billion).

Russia had blacklisted the country in early 2008 on claims that it was not cooperating enough in exchanging information on those vast bank assets, leading to tax evasion.

"[The deal] maintains Cyprus' very important advantages as a country through which investments can be made in Russia, and Cyprus is automatically removed from the blacklist," Stavrakis said.

Those advantages include "very low and competitive" taxes on Russian investments abroad and foreign investments in Russia, Stavrakis said.

Ilya Trunin, director of the Russian Finance Ministry's tax department, said Cyprus would be dropped from the blacklist once the agreement comes into effect.