The Ministry of Finance of the Russian Federation announced that the cross-border tax arrangement with Ukraine will be repealed from January 1, 2023. Ukraine dismissed the move, and Russia issued a formal response notice on the same day. The agreement had been in force since February 1995.
The ministry stated that the agreement will expire on January 1, 2023, with respect to source taxes on income paid or accrued on or after that date, and for other taxes for tax periods beginning on or after January 1, 2023. The official notice emphasized the termination would take effect at the start of 2023.
Earlier, Ukraine delivered a note to terminate the treaty on June 8. Russia followed with a response notice on August 23. The development means Ukrainian residents working in Russia will face the new tax regime under Russian law, and Russian residents in Ukraine will lose the benefit of preferential taxation once the agreement ends.
For Ukraine, that shift removes the current preferential treatment for Russian residents, who will now be taxed under Ukraine’s standard rates. Meanwhile, Russian residents employed in Ukraine can expect taxation to be administered in Ukraine once the treaty is fully terminated, rather than at reduced rates within Russia. The changes mark a significant reallocation of tax obligations between the two countries and a move away from the prior accord that governed income and other tax matters between them. The situation continues to unfold as each side implements its national tax rules in the absence of the treaty, with ongoing implications for cross-border workers and multinational activities across the region. Attribution: official statements from the ministries of finance of both countries and subsequent government notes describe the process and its expected tax consequences.