In the near term, Russian authorities could introduce new tax measures targeting foreign companies from countries labeled as adversaries. A prominent possibility is a dividend tax that could reach up to 25 percent, according to a report citing sources familiar with the matter.
Historically, many European firms operating within Russia benefited from double taxation agreements that minimized or deferred dividend taxes. Recent discussions suggest this landscape might shift, with several Western companies continuing to operate in the Russian market. The report names major European banks and energy groups as potential subjects of the proposed reform, including names like Deutsche Bank, ING Bank, Raiffeisen Bank International, UniCredit, Engie, OMV, and Total, among others.
In March, the Ministry of Finance floated halting the network of double taxation agreements with roughly 40 countries designated as adversaries, a move that would affect the 27 European Union member states. The new framework could impose a dividend tax of up to 25 percent on the profits of firms such as Armani, Clarins, Raiffeisen, and other EU incumbents operating in Russia.
Observers expect that any changes to Russia’s tax code could take effect toward late May or early June. This timing aligns with expectations that the European Union would advance its next package of sanctions against the Russian Federation around the same period.
Analysts note that once the agreements that prevent double taxation are terminated, Moscow would be positioned to levy a new tax on Western companies remaining in Russia. The anticipated rate on dividends could climb to as much as 25 percent, marking a significant shift for foreign investors in the Russian market.
In parallel developments, Finance Minister Anton Siluanov indicated that for foreign entities, the tax on the sale of a Russian business would apply at a rate of 10 percent of the transaction value. Despite these broader tax considerations, the government affirmed that existing incentive measures designed to encourage business activity in Russia would continue to apply for Western and other foreign companies alike.