In the foreseeable future, Russian authorities may impose additional taxes on foreign companies from so-called “enemy” countries. We are talking about dividend tax, its rate can be calculated at the level of 25%, informs The EUobserver online newspaper citing a source.
Until recently, most European firms operating in the Russian domestic market did not pay taxes on dividends due to double taxation agreements. However, the situation may change in the future. A number of Western companies are currently operating on the Russian market. The article states that a possible innovation could affect the largest European banks, including Deutsche Bank, ING Bank, Raiffeisen Bank International, UniCredit, energy companies Engie, OMV, Total and others.
“In March, the Ministry of Finance offered to freeze double taxation agreements with about 40 “enemy” countries that impose sanctions on Russia, such as the 27 EU countries. <….> The new rules could impose a tax of up to 25 percent on the profits of Armani, Clarins, Raiffeisen and the remaining EU firms in Russia.
According to the source, relevant changes in Russia’s tax legislation may come into force in late May – early June this year. By this time, as expected, the European Union (EU) authorities will introduce the 11th package of sanctions against the Russian Federation.
“As soon as the agreements (avoiding double taxation – socialbites.ca) are terminated, Moscow will impose a new tax on Western companies still located in Russia – they will have to pay a tax of up to 25 percent on dividends,” concludes the article.
April 14 Finance Minister Anton Siluanov declarationFor foreign companies, the tax on the sale of business in Russia will be applied at the rate of 10% of the transaction amount. At the same time, all incentive measures for doing business in the Russian Federation, including Western companies, will continue.