Malta, another island state, also agreed to a new protocol at its 2013 DBA. According to the protocol, the withholding rate is increased to 15 per cent on dividends and interest collected. Exemptions are granted for certain institutional investments. The agreement between Malta and Russia was signed on 13 August. The United States and Russia have a tax treaty in place. The main purpose of the tax treaty is to ensure proper tax treatment of funds earned by US citizens, Russian citizens, ex-pats and residents of the other country. Where a tax treaty is in effect, it generally provides for a reduction in taxes on passive income, the elimination of certain taxes, such as foreign interest income, which are generated by residents of the other country and the prevention of double taxation. However, there are several countries that have tax agreements with Russia that leave these interest payments unta imposed (or have a very low withholding tax rate), eliminating the potential for double taxation. However, Russia is in the process of amending some of these treaties. Since 2002, when the new Income Tax Act came into force, it has changed the tax regime of foreign companies operating in Russia. The old, highly bureaucratic procedure is now being replaced by a very simplified procedure that allows investors to use the double taxation agreements that Russia has signed with different countries more quickly over the years.
The main purpose of these contracts is to protect the investor from double taxation for the same income in two different countries and to prevent tax discrimination against a signatory country abroad. In particular, interest, royalties, pensions and dividends are subject to these double taxation agreements. Members of the Eurasian Economic Union in Armenia, Belarus, Kyrgyzstan and Kazakhstan all have additional free trade status with Russia through the EAEU partnership. Here is an introduction to the double taxation agreements concluded by the EAEU Member States. It is necessary to conclude an agreement between the Government of the Russian Federation and the Government of the Republic of Albania in order to avoid double taxation with regard to income and capital tax agreements, in order to avoid double taxation. For example, a person or company working temporarily in another country would benefit from contracts that would avoid double taxation. As a result, tax agreements reduce barriers to international investment, which can benefit the country of origin by creating business growth in their own countries. However, in the current situation, Russia is changing course to protect its tax base by increasing taxes on cross-border income. The role of double taxation conventions is to control how profits are taxed in different countries. Russia Briefing is produced by Dezan Shira – Associates.
The company supports foreign investors in Russia and Russian investors in Asia and has partner offices in Moscow and St. Petersburg, as well as professional service offices throughout China, ASEAN and India. Please contact us at the support firstname.lastname@example.org or visit our website at www.dezshira.com Foreign investors who run companies in Russia and who are interested in getting more information on preventing double taxation can contact our lawyers in Russia. Cross-border taxation is a complex area of tax policy. If one company is headquartered in one country, offices in another and sales in another, the laws of the three countries must be taken into account. The tax policies of different countries often overlap, so that revenues from sales in one country can be taxed twice – first, in the country where the sale is made by a local office, and second, if those revenues are paid in the form of dividends to the parent company in another country.