Foreign investors who are operating a company in Russia are entitled to benefit from the provisions of the double taxation treaties signed by the representatives of the state. Russia signed several treaties for the avoidance of double taxation with various countries worldwide. The main aspects of a double taxation agreement (DTA) refer to various tax reductions or exemptions applicable to companies or natural persons, for matters such as royalties, dividends, capital gains, and many others. Our Russian team of company formation representatives can provide an in-depth presentation to investors who are interested in opening a company in Russia.
Businessmen interested in company formation in Russia must know that the country signed numerous double taxation agreements.
At the moment, Russia signed DTAs with the following contracting states: Albania, Algeria, Argentina, Australia, Austria, Armenia, Azerbaijan, Belarus, Belgium, Botswana, Bulgaria, Canada, China, Chile, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, North Korea, South Korea, Kuwait, Kyrgyz Republic, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Mali, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Qatar, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Spain, South Africa, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Thailand, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekistan, Venezuela, Vietnam.
Our team of company formation agents in Russia can offer more details on the stipulations of the above-mentioned treaties. Plus, those who want to open a company in Russia are invited to discuss further details with our team of specialists in charge. We also have a team of accountants in Russia at your disposal.
The DTAs signed by Russia with other contracting states are drafted in accordance with the Model Agreements on Avoidance of Double Taxation of Income and Property. At the same time, the Russian DTAs also take into consideration the provisions of the Model Tax Convention on Income and Capital imposed by the Organisation for Economic Cooperation and Development (OECD).
The documents refer to the taxation of residents and legal entities, tax residents of one of the contracting states mentioned above, and it prescribes the way in which it is applied for numerous aspects, such as:
The year 2023 came with surprising news regarding varied agreements signed by Russia with countries worldwide. Here we are referring to the double taxation treaties that have been put on hold for the moment. It is also the case of DTT signed by Russia with the UK, and below you can find some details in this regard:
On the other hand, the UK-Russia DTT does not permit this autonomous action, and the UK authorities reflect the agreement to stay in force, complying with its terms. It is also stated that Russia has suspended agreements signed with major offshore destinations like Malta, Cyprus, Switzerland, and Luxembourg.
More information about the news affecting the provisions of double taxation agreements signed by Russia can be provided by one of our specialists. Also, if you want to set up a company in Russia, feel free to contact us at any time.
Regarding the momentary suspension of some double taxation agreements signed by Russia with countries worldwide, there are immediate effects from a tax point of view. Broadly speaking, this means that there will no longer be advantageous tax rates delivered by the DTTs for payments of passive types of income from Russia to countries like:
As such, only standard tax rates will apply in the future, as follows:
In this case, the latter change may have an undervalued effect. Thus, the tax authorities can have varied opportunities and fiscal motives to requalify any questionable expenditures with low economic explanation into delivery of profit which is subject to a 20% withholding tax rate at the basis of income in Russia.
Although the current social context has reached proportions and closed some important doors for Russia, the country continues to attract foreign investors who want to prosper in this territory. Here are some important figures to analyze in this regard:
Persons interested in company registration in Russia are invited to contact our team of company formation consultants for more details on the main benefits deriving from this type of treaty.