Russia: Certain DTA regulations with 38 states put on hold

On Aug. 8, 2023, the Russian President Putin issued a presidential decree temporarily suspending parts of its double taxation agreements (DTAs) with 38 so-called "unfriendly" states. The relevant decree was published on the Russian Legal Portal and entered into force immediately. The decree instructs the Russian government to submit to the parliament a draft law on the suspension of DTT provisions, but according to paragraph 4 of the decree, the suspension of certain DTA provisions comes into force from the date of the publication of the decree, i.e. on August 8^th, 2023.

This affects the EU Member states with the exception of Estonia (Russia does not have a ratified DTA with Estonia), Latvia (Latvia suspended the DTA in 2022) and the Netherlands (The DTA was denounced fully at the beginning of 2022).

Moreover the following states are affected: US, Canada, Japan, Korea, Singapore, Australia, New Zealand, UK, Switzerland, Norway, Albania, Montenegro, Macedonia and Iceland.

As a consequence, from 08.08.2023 on the preferential withholding tax rates for dividends, interest and royalties cease to apply. Instead, payments from Russia are subject to the standard withholding tax rates ( Dividends: 15%, Interest/Royalties/Other Income: 20% ) established by the Tax Code of the Russian Federation.

For any questions please do not hesitate to reach out to Dr. Igor Fleischmann.