The US Treasury Department has announced it is suspending certain provisions of the 1992 tax convention with Russia. The step follows Moscow’s scrapping of double-taxation treaties last year with those who have imposed sanctions against the country.
According to a press release published on the Treasury website on Monday, a formal notice has been provided to Moscow to confirm the suspension by mutual agreement. This is a response to Russia’s notification dated August 8, 2023, the department said.
The suspension will take effect on August 16, 2024, and will continue “until otherwise decided by the two governments.”
Double-taxation treaties are agreements between states designed to protect against the risk of the same income being taxed twice in both countries. Russia had such agreements with many nations, including EU member states, the UK, Australia, Canada, and the US, all of which have imposed sanctions on Moscow.
In 2023, Russian President Vladimir Putin signed a decree on the suspension of certain provisions of tax treaties with what Moscow terms ‘unfriendly states’.
In particular, the decree cancelled agreements between Russia and the US on the avoidance of double taxation and the prevention of tax evasion on income and capital. All in all, Moscow scrapped double-taxation agreements with 38 countries, including the UK, Canada, Switzerland, Japan, the Czech Republic, Denmark, Norway, Italy, Finland, France, Germany, Spain.