The Ministry of Finance and the Ministry of Foreign Affairs of the Russian Federation propose to immediately suspend double taxation agreements with all “hostile countries”. For this it is said Interfax with regard to the Ministry of Finance, it is proposed to issue a special presidential decree.
The Ministry of Finance recalls that in February the European Union alight Russia in the “grey list” of tax jurisdictions.
“The unilateral introduction of restrictive measures is a violation of international law. Accordingly, Russia has grounds to introduce retaliatory measures,” the Ministry of Finance of the Russian Federation said. Such a response should be the suspension – “until the restoration of Russia’s violated rights” – of an agreement on the avoidance of double taxation.
If the proposal is accepted, the agreements will be suspended from the moment the corresponding decree of the President of the Russian Federation is issued. The agreements that are going to be “suspended” are necessary so as not to pay tax on the same income in two states at the same time.
In May 2022, Latvia suspended the application of the agreement to avoid double taxation, citing the violation of international law by the Russian Federation as the reason for this decision and demanding the withdrawal of troops from Ukraine. In response, Russia also suspended the validity of this document.