On August 8, 2023, the President of the Russian Federation signed Decree No. 585 "On the suspension by the Russian Federation of certain provisions of international treaties of the Russian Federation on taxation issues."
This Decree suspends since its publication date the double taxation treaties with the following countries: Poland, USA, Republic of Korea, Bulgaria, Sweden, Luxembourg, Romania, Kingdom of Great Britain and Northern Ireland, Hungary, Slovakia, Albania, Ireland, Belgium, Slovenia, Croatia, Canada, Montenegro, Switzerland, Czech Republic, Denmark, Italy, Norway, Finland, Germany, France, Macedonia, Cyprus, Spain, Lithuania, Iceland, Austria, Portugal, Greece, New Zealand, Australia, Singapore, Malta, Japan.
Thus, when interacting with residents of the above countries, the tax rate provided for by the Tax Code of the Russian Federation will be applied, and not the special rate provided for by the affected treaties in terms of the following payments to such residents:
- income from real estate
- dividends
- interest on debt claims
- deductions from copyrights and licenses
- income from employment
- directors' fees
- pensions, etc.
Based on the foregoing, and also taking into account the fact that in a significant number of cases Russian companies act as agents and are required to withhold and remit the appropriate amounts of taxes to the State budget, starting from August 8, 2023, companies involved in interaction with residents of the above countries need to revise the applicable tax rates, as well as, possibly, amend the relevant agreements with non-residents.
Accetera has comprehensive expertise in non-resident taxation and contract law and is ready to offer you the relevant services.