Friggo Kraaijeveld named countries to renegotiate the tax treaties with Russia
"In 2021 Russia is likely to renegotiate the tax treaties with Singapore, Switzerland and Hong Kong Special Administrative Region, and later with Ireland, the United Kingdom, Austria and Sweden," Friggo Kraaijeveld, Partner of FinExpertiza Netherlands, told RIA Novosti.
In March 2020, Vladimir Putin, the Russian President, charged to levy outbound dividends and interest income with 15% tax. This requires revising the country's double tax agreements with other countries. The President warned Russia would unilaterally terminate the agreements otherwise.
Russia has agreed amendments to its tax treaties with Cyprus, Malta, Luxemburg and the Netherlands; however it has initiated denunciation of the agreement with the latter. According to the amended agreements, the amount of tax that Russia may collect at source on cross-border payments of dividends and interest is increased to 15%, however an incentive tax rate of 5% will also be applicable. According to the Russian Finance Ministry, the incentive will be applicable for institutional investments and public companies (at least 15% of shares are free float) if they owned at least 15% of equity in the entity that pays income during at least one year.
"In 2021, Russia is likely to renegotiate the tax treaties with Switzerland, Singapore and Hong Kong, Foreign (not only local) investors in Russia can treat these jurisdictions as a favourable environment for investments", - believes Friggo Kraaijeveld.
The expert adds that "less popular investment centres as Ireland, the United Kingdom, Austria and Sweden would be the next step to amend treaties so that to increase the withholding taxes."
In December, Anton Siluyanov, the Russian Finance Minister said Russia did not plan to revise the tax treaties with large strategic partners such as France, the USA, Italy and China.
Resource: PRIME Business Feed