MOSCOW, August 3. /TASS/. Russia will initiate denunciation of the double tax agreement with Cyprus from August 3, the Russian Finance Ministry said on Monday.

"The Russian Finance Ministry starts the agreement denouncing procedure to fulfill the assignment of the Russian President on taxation of incomes in the form of dividends and interest paid from the territory of the Russian Federation to the Republic of Cyprus at the rate of 15%," the Ministry says.

The Russian Finance Ministry considered Cyprus’ proposals on amendments to tax laws as unfeasible, the Ministry said.

"The Russian Finance Ministry held negotiations with the Cyprus’ Ministry of Finance on amendments to the Russian-Cypriot double taxation agreement in respect of increasing the withholding tax to 15% for dividends and interest payments. Cyprus put forward its proposals during talks. Having analyzed them, the Russian Finance Ministry arrived at a conclusion that they essentially dilute and make unfeasible the anticipated effect of the Russian side from undertaken measures to support the national economy and social programs, and will promote tax-free withdrawal of huge financial resources of Russian origin from the territory of Russia through the jurisdiction of Cyprus," the Ministry added.