The Ministry of Finance of the Russian Federation has removed Cyprus from the ‘Black List’ that applies for the purpose of certain tax provisions and it effects from 1 January 2013. Dividends paid from Cyprus companies to Russian companies will be exempt from taxation in Russia (subject to the normal holding conditions), benefiting from the Russian participation exemption. The participation exemption does not apply to dividends from countries on the Black List and was previously not available in respect of dividends from companies in Cyprus. The transactions of Russian companies with Cyprus companies will not be subject to the burdensome transfer pricing provisions for countries on the Black List. The standard transfer pricing regulations will however continue to apply.