[World Tax News] Russia Stands Firm, Denies UK’s Plea to Undo Tax Treaty Suspension and More
- Blog|News|International Tax|
- 2 Min Read
- By Taxmann
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- Last Updated on 28 August, 2023
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Editorial Team – [2023] 153 taxmann.com 648 (Article)
World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.
1. Russia stands firm, denies UK’s plea to undo Tax Treaty Suspension
On August 8, 2023, Russia issued a Presidential decree suspending significant portion of the key provisions in numerous Double Taxation Agreements. This decree impacts Double Taxation Agreements involving 38 countries, including the 1994 UK-Russia Double Taxation Convention.
On 18th August 2023, the UK HMRC issued an update stating that the UK-Russia Convention does not permit this unilateral action.The government viewed this action with utmost seriousness and asked Russia to reverse the suspension.
Subsequently, on August 19, 2023, the Ministry of Finance of Russia issued release stating that the Vienna Convention on the Law of Treaties allows such a form as the suspension of agreements, including their provisions, if the rights of another country have been violated.
The partial suspension of tax agreements with unfriendly countries provided for by the Decree will remain in effect until the rights of the Russian side are restored or the agreements are denounced.
Source: Update by UK
Release by Ministry of Finance, Russia
2. Russia allows tax relief and interest payment reductions for export credit agencies and banks under suspended tax treaties
The Russian Ministry of Finance has released a statement regarding the ongoing implementation of withholding tax exemptions and interest payment reductions, even after the recent suspension of 38 tax treaties with countries considered ‘unfriendly’.
The release states that tax agents can still avoid calculating and withholding corporate income tax on interest payments to export credit agencies in unfriendly countries and banking organizations, even though previous international tax treaties of Russia that exempted them from withholding tax have been suspended by the Decree.
Source: Statement by Ministry of Finance, Russia
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