Aug 11, 2020
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The Russian Federation can offer Switzerland and Hong Kong to change tax treaties

The Russian Federation may offer Switzerland and Hong Kong to change bilateral agreements on the avoidance of double taxation, Deputy Prime Minister Alexei Overchuk said during an online meeting of Russian President Vladimir Putin with the Cabinet of Ministers.

We conduct a careful analysis of all agreements on the avoidance of double taxation that the Russian Federation has with foreign partners. Now we are carefully looking at Switzerland and Hong Kong from the point of view of addressing them with a similar proposal, - quotes TASS policy.

He added that Moscow has submitted proposals for new versions of tax agreements to the authorities of Malta, Luxembourg and the Netherlands. However, Malta and Luxembourg gave positive responses.

The Kremlin wants to raise taxes on dividends withdrawn abroad from 2% to 15%. The initiative requires amendments to treaties for the avoidance of double taxation with some states. Cyprus has already agreed to amend the agreement with Russia.

According to the Ministry of Finance of the Russian Federation, as early as 2021, the country's economy will begin to receive an additional 130-150 billion rubles annually from the increase in Cyprus duties on dividends. Moscow also offered the Netherlands, Malta and Luxembourg to revise the relevant documents on conditions similar to those offered to Cyprus.

Earlier reported that the Ministry of Finance of the Russian Federation agreed to establish a three-year transition period, allowing Russian companies from 2021 to 2024 to pay dividends abroad at a zero tax rate.

Russian President Vladimir Putin announced his intention to toughen the conditions for paying dividends from next year at the end of March. On his instructions, Moscow is revising tax rates with jurisdictions popular with Russians, for example, Malta, Cyprus and Luxembourg.

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