Russia and Cyprus are to sign a new double taxation avoidance agreement, aiming to remove Cyprus from Russia’s "blacklist" of “uncooperative territories”, reports Tax-News.

Cyprus was added to Russia’s notorious blacklist of 54 countries that Russia views as not having demonstrated a sufficient level of cooperation with its tax authorities.

The blacklist was part of an amendment to the Russian tax code which introduced a tax exemption on the repatriation of dividends from foreign subsidiaries of Russian companies, specifically excluding Russian subsidiaries based in territories and countries on the so-called blacklist.

The agreement, which was initialled in April 2009, will allow an extensive exchange of tax information and is due to be signed in October.

Cyprus has made substantial investments in Russia, reaching $3.12 billion in the first six months of 2010, according to Russian business daily newspaper Vedomosti.