Moscow rejected the British government’s plea to reverse the course on double taxation agreements with “unfriendly states”
Western countries have been unilaterally imposing economic and other restrictive measures against Russia, and under these circumstances Moscow will not fulfill its part of the agreements unilaterally until the sanctions are lifted, the Ministry of Finance announced on Saturday.
Russian President Vladimir Putin signed a decree on the suspension of certain provisions of tax treaties with the United States, several EU countries, and other so-called “unfriendly states” earlier this month. On Friday, the British government urged Russia to reverse its decision, stating that the issue is of the “utmost seriousness.” London claimed that the “UK-Russia Convention does not permit this unilateral action.”
In its statement, directed at the “unfriendly states” and the UK specifically, the Russian ministry cited multiple breaches, including the addition of Russia into the EU Blacklist of non-cooperative jurisdictions for tax purposes, refusals to issue confirmations of permanent residence in a foreign country to their residents for the application of agreements, as well as the suspension of the exchange of tax information with Russia.
“The partial suspension of tax agreements with unfriendly countries provided for by the Decree will remain in effect until the rights of the Russian side are restored or the agreements are denounced,” the ministry stated, arguing that the “Vienna Convention on the Law of Treaties allows for such a form as the suspension of agreements, including their individual provisions, if the rights of another country have been violated.”
Double-taxation treaties are agreements between states designed to protect against the risk of the same income being taxed twice in both countries. All in all, Moscow suspended double-taxation agreements with 38 countries, including the UK, Canada, Switzerland, Japan, the Czech Republic, Denmark, Norway, Italy, Finland, France, Germany, Spain and others who have imposed anti-Russia sanctions.
At the same time, the government was instructed to take measures to reduce the impact of the tax treaties’ suspension on the Russian economy.
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