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Russia Suspends Tax Treaty Benefits With 38 Jurisdictions

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Posted on Aug. 9, 2023

Russian President Vladimir Putin signed a decree that suspends double taxation treaty benefits with countries it calls “unfriendly” because of the sanctions they have imposed on Russia after it invaded Ukraine.

Putin signed the decree August 8, suspending tax treaty benefits for countries that have taken actions that hinder Russia's economic success. It discontinues treaty benefits “until foreign states eliminate their violations of the legitimate economic and other interest of the Russian Federation.” Russia has claimed that the economic sanctions and the suspension of information sharing are a violation of international law.

The decree entered into force August 8 and suspends some treaty provisions with 38 countries, including Canada, Denmark, Poland, the United Kingdom, and the United States. The suspended provisions cover dividends, interests, royalties, and other general tax relief provisions. Denmark had already terminated its treaty with Russia, and the provisions will cease to apply as of January 1, 2024.

After Russia invaded Ukraine in February 2022, the G-7 nations and the EU announced plans to revoke Russia’s most favored nation status. In April 2022 the United States suspended the exchange of tax information with Russia. EU member states "decided to discontinue all exchanges of information for tax purposes” with Russia and Belarus, according to a June 2022 report, which cited “acts of aggression against Ukraine.”

In March the Russian Ministry of Foreign Affairs announced its intent to suspend tax treaties "with all countries that have introduced unilateral economic restrictions against Russia." The Cabinet submitted the proposal in June.

The 38 countries are Albania, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

Subject Areas / Tax Topics
Magazine Citation
Tax Notes Int'l, Aug. 14, 2023, p. 879
111 Tax Notes Int'l 879 (Aug. 14, 2023)
Institutional Authors
Tax Analysts
Tax Analysts Document Number
DOC 2023-22778
Tax Analysts Electronic Citation
2023 TNTI 151-4
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