Russia cancels tax agreements with 38 Western countries

Russian President Vladimir Putin on Tuesday signed a decree on the suspension of certain provisions of tax treaties with the United States, several EU countries, and other so-called ‘unfriendly states’. The idea to scrap double-taxation treaties with those who hit Moscow with sanctions had been proposed by Russia’s finance and foreign ministries. 

According to the document published on Russia's official legal information portal, the decision was “based on the need to take urgent measures” due to the ‘unfriendly actions’ of some countries. The double-taxation treaty ban will remain in place “until foreign states eliminate the violations they have committed of the legitimate economic and other interests of the Russian Federation, the rights of its citizens and legal entities” or until the relevant documents cease to be valid, it stated.

At the same time, the government was instructed to take measures to reduce the impact of the tax treaties' suspension on the Russian economy. The Cabinet of Ministers is now required to submit a bill on the suspension of such documents to the State Duma while the Russian Foreign Ministry was also instructed to notify the relevant foreign states of the decision.

In particular, the decree suspends agreements between Russia and the US on the avoidance of double taxation and the prevention of tax evasion on income and capital. All in all, Moscow suspended double-taxation agreements with 38 countries, including the UK, Canada, Switzerland, Japan, the Czech Republic, Denmark, Norway, Italy, Finland, France, Germany, Spain and others who have imposed anti-Russia sanctions.

Double-taxation treaties are agreements between states designed to protect against the risk of the same income being taxed twice in both countries.

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