Russia considering tax reform

RUSSIA / FSU POLITICS - In Brief 12 May 2021 by Alex Teddy
On May 11 the Duma passed a bill ending Russia's bilateral tax treaty with the Netherlands. Attempts to negotiate a new tax agreement had come to nought. Yandex and X5 Retail Group are both based in the Netherlands. It looks as though in January 2022 these companies will have to pay tax in both jurisidictions. Russia estimates it lost USD 4.6 billion from companies moving their profits to Holland. Moscow aims to revise tax agreements with Switzerland, Singapore and Hong Kong. If that is successful then 90% of the dividends transferred abroad will be taxed 15% in Russia.Putin announced in 2020 that he wanted to raise tax on offshore dividend payments from 5% to 15%. Russian companies have been spending money abroad to avoid paying tax in Russia. Tax agreements have already been successfully renegotiated with Cyprus, Malta and Luxembourg.

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