Putin to suspend double taxation agreements with the West at the end of June – Kommersant
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At the end of June, a decree by Russian President Vladimir Putin will be published on the suspension of double taxation agreements (DTAs) with “unfriendly” countries. This is reported Forbes with reference to two sources familiar with the process of preparing the document. In March, the Ministry of Finance and the Foreign Ministry proposed to suspend the DTT with “unfriendly” countries.
The suspension means that the reduced or zero withholding tax rates stipulated by the agreements will no longer apply. As a rule, DTT provides for a reduced tax on dividends (5-10% versus Russian 15%) and a zero rate on interest payments and royalties (instead of 20%). Individuals under agreements can count in Russia the amount of income tax paid abroad (and vice versa).
A Forbes source in the Federal Tax Service (FTS) confirmed that double taxation protection for individuals is being discussed. However, no concrete decision has yet been made on this issue. “In addition, the volume of transactions with individuals is considered as not very significant. But the Federal Tax Service put forward an argument (about double taxation of individuals.— “b”) as an argument against suspension “b”Basically,” he said.
The interlocutor of the publication, who participated in the discussion at the stage of collecting opinions by the Ministry of Finance, believes that breaking tax agreements, first of all, is a political step. The measure does not have a fiscal purpose, notes a Forbes interlocutor in the Federal Tax Service. According to him, the tax service did not even calculate the amount of additional fees to the budget from the increase in taxes on payments abroad.
On March 15, the Ministry of Finance and the Ministry of Foreign Affairs proposed to suspend double taxation agreements with “unfriendly” ones. Such a measure should be a response to sanctions, as well as to the February inclusion of Russia in the black list of jurisdictions that do not cooperate with the European Union on tax issues. The departments did not provide a list of frozen DTTs at that time. In total, Russia has about 80 such bilateral agreements – of which about 40 were concluded with “unfriendly” countries. In particular, these are the EU countries, including Malta, Cyprus, Luxembourg, as well as the USA, Great Britain, Switzerland, Japan and Singapore.
More details – in the material “Kommersant” “Tax inevitability”.
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