International Tax Treaties Entered Into Force in Russia

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The Russian Federation has ratified the protocols for a number of treaties with Sweden and Austria. An international treaty with Japan also entered into force. Ratification of the agreement with Sweden allowed to reduce the requirements for paying the tax rate of 5% on dividends. According to the protocol, a non-resident who receives dividends must be the owner of 10% of the shares, the price of which is not less than 80 million euros.

The changes in the protocol also affected the taxation of income from the sale of securities of real estate companies, with a total share of 50% or more. In addition, companies operating in the jurisdictions of Russia and Sweden can take advantage of a number of benefits.

As for the agreement with Austria, companies also have the opportunity to apply a reduced tax rate on dividends. Some provisions on taxation of profits from the sale of securities were added, over 50% of which are represented by real estate.

The ratification of the treaty with Japan has also changed a number of tax provisions. A dividend rate of 5% applies to organizations that have been owners of 15% of the shares over the past year. In other cases, taxes are paid at a rate of 10%.

One of the features of the contract with Japan is Article 11, which speaks of taxation of dividends at a 10% rate. This rate can be applied if interest was obtained from profits, sales, other financial income of affiliates. Also, a 10% tax can be applied if the income was received from the price rise of the dependent person’s property, as well as from partner payments.