The Russian government plans to enact legislation to partially suspend double taxation agreements with unfriendly countries. The newspaper writes that we are talking about agreements between Moscow and 38 foreign countries “News”.
The material shows, first of all, that the Russian authorities plan to suspend cooperation with the United States and European Union (EU) countries in this area. The changes will also affect agreements with Canada and Japan.
According to the publication, the relevant document was developed by the country’s Ministry of Foreign Affairs and Ministry of Finance. At the same time, the government commission on legislative activities has already approved this initiative.
“We had to do this after the imposition of sanctions and unprecedented attempts to put pressure on the country’s economy,” the authors of the publication explained.
As stated by a source in the State Duma of the Russian Federation, a bill on the suspension of tax agreements must be submitted to parliament for consideration by the end of January 2024. Despite the fact that Russian President Vladimir Putin signed a decree in August this year on the suspension of some provisions of double taxation agreements, such initiatives need to be given importance at the legislative level.
The press service of the Ministry of Finance of the Russian Federation announced that, in fact, the validity of certain articles of the agreements was suspended on August 8. It was then that the Russian diplomatic department sent notes to unfriendly states.
“The agreements only suspend the effect of articles providing for reduced tax rates on interest and dividends; the rules for avoiding double taxation for individuals will remain,” said Alexey Sazanov, Deputy Head of the Finance Department.
Double taxation is the application of taxes in different countries to profits from the same transaction.
At the same time, the wages of Russians working abroad are considered as income from sources in the Russian Federation. Therefore, the need to pay income tax in other countries will depend only on whether the government of another state decides to terminate the agreement with Moscow.
Formerly in the State Duma of the Russian Federation offered Increasing the “tax” contribution limit fivefold.