TAX-I NEWSLETTER

Tax-i 199: Developments in the international tax regime with the suspension of part of the double tax agreements between Russia and 38 countries

According to information of the international tax network WTS Global of which our company is a member, it appears that we have developments in the international tax environment following the decision of the Russian President to suspend parts of the Double Tax Agreements between Russia and 38 so-called "unfriendly states" by a presidential decree issued on August 8, 2023.

The aforementioned presidential decree instructs the Russian government to submit to the parliament a draft law to suspend part of the provisions of the double tax agreements between Russia and the said countries, while at the same time, provides for an immediate suspension of the application of specific provisions of the bilateral tax treaties concerning preferential withholding tax rates for dividends, interest and royalties, from the date of publication of the decree, i.e. August 8th, 2023.

As a result, payments made by tax residents of Russia to tax residents of these 38 states will be subject to the normal withholding tax rates set by the Tax Code of the Russian Federation (Dividends: 15%, Interest/Royalties/Other Income: 20%).

The states affected by the reform in question are all members of the European Union with which Russia has a Double Tax Agreement in force, including Greece, as well as the USA, Canada, Japan, Korea, Singapore, Australia, New Zealand, United Kingdom, Switzerland, Norway, Albania, Montenegro, North Macedonia and Iceland.

You can find more information on the website of WTS Global.


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