Russia thinks about revising tax agreements with Hong Kong and Switzerland

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The Russian government is studying tax agreements with all countries and may send proposals to revise Switzerland and Hong Kong, Deputy Prime Minister Alexei Overchuk said at a meeting between Russian President Vladimir Putin and the government on August 11.

Overchuk said that on August 10, an agreement was reached with the Minister of Finance of Cyprus on amendments to the document on the avoidance of double taxation. Prior to that, on August 3, it became known about the launch of the procedure for breaking the tax agreement with Cyprus due to the fact that the republic was not satisfied with Moscow’s proposal to revise the agreements. Later, the Russian Federation agreed to new negotiations.

“Cyprus has agreed with the Russian proposals. Yesterday a protocol of agreements was signed, and we also initialed a protocol on amending the agreement on the avoidance of double taxation between the Russian Federation and the Republic of Cyprus. We also agreed that the countries will complete their state procedures and in September we will sign a protocol on amendments so that it will enter into force on January 1, 2021, ”the Deputy Prime Minister said.

From now on, a 15% rate on dividend income and interest income will be charged at source in the RF. According to the Ministry of Finance, the additional income that the Russian budget will receive from this agreement may amount to 130-150 billion rubles, Overchuk said.

He also added that relevant work is underway with Malta, the Netherlands and Luxembourg, as well as Switzerland and Hong Kong.

On March 25, Russian President Vladimir Putin announced plans to raise rates for the withdrawal of capital abroad. In particular, he instructed the government to adjust the agreements on the avoidance of double taxation with countries where the income of Russians is transferred. At the same time, he stressed that Moscow will unilaterally withdraw from such treaties with those states that will not agree to increase taxes on dividends.

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