The Russian Federation Votes to Denounce the Double Tax Treaty on Income and Capital with the Kingdom of the Netherlands
The Lower Chamber of the Russian Parliament voted to denounce the agreement between Russia and the Netherland for the avoidance of double taxation and prevention of tax evasion on income and capital.
As we mentioned in our previous article dated April 3, 2020;
“On the 25th of March 2020, the President of the Russian Federation Mr. Vladimir Putin announced a series of measures in response to the Covid-19 pandemic. From the international tax perspective, it was announced that dividends and interest withholding tax rates in treaties for the avoidance of double taxation should be raised to 15%. It was further stated that should an agreement not be reached with a treaty country then the treaty shall be unilaterally terminated.”
The Netherlands and Russia could not reach an agreement on the terms proposed by the Russian Government and as a result the Russian Government finally voted to denounce the double tax treaty currently in place with the Netherlands. The explanatory note on the bill submitted by the Russian Government to the Russian Parliament read “If the Russian side submits a notification on agreement denunciation before 30 June 2021, it will be terminated on 1 January 2022”.
In 2020, the Russian Federation reached an agreement with the Republic of Cyprus whereby the amending protocol came into force on January 15, 2021 and effective from January 1, 2021.
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