17 Feb 2021 14:01

Russian Duma ratifies new tax agreement with Malta

MOSCOW. Feb 17 (Interfax) - The Russian State Duma has ratified a protocol on amendments to the agreement on avoidance of double taxation with Malta regarding an increase to 15% for withholding tax on dividends and interest.

The government introduced the document, N1085849-7, to the parliament at the end of December. Amendments to the protocol were endorsed at the beginning of October.

"Establishing a tax regime at the source of income in the form of dividends and interest payable to persons who are tax residents of Malta at a rate of 15% will result in the identification of additional sources of tax revenue to the relevant budgets of the Russian Federation's budgetary system of," an explanatory note to the new agreement says.

The protocol stipulates exceptions, according to which preferential treatment is applied to income in the form of dividends and interest, setting the withholding tax rate at no more than 5%, applicable to institutional investment, as well as to public companies that have at least 15% of shares in free float and hold at least 15% of the capital of the company that is paying said income during the year.

The ratified protocol is provisionally effective from January 1, 2021 and comes into force on the date of the last written notification of the states.

The radical review of agreements with Malta, Cyprus, Luxembourg and other so-called transit jurisdictions was raised in March as part of the fight against the consequences of the coronavirus.