Suspension of agreement with 'unfriendly' nations does not extend to double taxation regulations - Sazanov

ST. PETERSBURG. June 14 (Interfax) - The planned suspension of double taxation treaties with "unfriendly" states will not affect clauses allowing offsetting of profit taxes, including personal income tax, Deputy Finance Minister Alexei Sazanov said.

In March, the Finance Ministry and the Ministry of Foreign Affairs reported that they proposed that the President issue a decree suspending double taxation treaties with all the countries that had introduced unilateral economic restrictive measures against Russia. If the right to suspend the agreements is exercised, all payments of dividends, interest and royalties to "unfriendly" countries will be subject to withholding tax in Russia at rates of 15% and 20%, respectively.

"Certain articles of the agreements will be suspended, but not the agreements themselves, so the norms on avoiding double taxation will remain when it comes to individuals," Sazanov told reporters on the sidelines of SPIEF-2023.

The deputy minister said that there are no plans for denunciation under these agreements, with suspension of articles which provide for lower tax rates on interest, dividends and royalties. "The agreements themselves will remain in force, and the norms on avoidance of double taxation, that is, the possibility of offsetting tax, including personal income tax, will remain in force," Sazanov said.

He also said that the Finance Ministry is working on revising the list of countries that do not exchange tax information with Russia.

"Such work is ongoing, the final decision is up to the government, but we are doing such work. Many countries have ceased to exchange information with us, respectively, the list should be updated," the deputy minister said.