As of January 1, 2013, Cyprus will no longer be included on the "blacklist" of countries that give preferential treatment and/or do not disclose their financial operations.

The removal of Cyprus from the "blacklist" followed the Russian Federation’s ratification of the Russian-Cypriot Double Taxation Treaty, which establishes the legal framework for information exchange between both countries.

The significance of Cyprus' removal from the "blacklist" is profound when considering the effect it will have on the taxation of dividends and transfer pricing. Russian companies will now have the opportunity to implement options that were previously unavailable due to Cyprus' "blacklist" status. Moreover, Russian companies will now have the chance to apply a 0% tax rate on dividends received from Cyprus (in case of compliance with other requirements provided by the Russian tax legislation). Lastly, tax authorities will no longer be able to control payments made by Russian companies to unrelated Cypriot companies.

Nevertheless, recent events have prompted Russians to assume a more cautious approach to resuming their financial operations in Cyprus. The temporary freezing of bank accounts, together with the significant levies placed on accounts of more than US$100,000 – many of which are held by Russian citizens – have made Cyprus less attractive as jurisdiction for Russian businesses. Furthermore, in April 2013, the Cyprus Parliament approved a tax increase from 10% to 12% on company profits, together with an increase from 15% to 30% on taxes on income in bank accounts, making Cyprus all the more unappealing.