Russia may tear up tax treaties with ‘unfriendly’ states

The proposed move is a response to the country’s inclusion on the EU’s blacklist of non-cooperative tax jurisdictions

Russia’s Finance Ministry and Foreign Ministry have proposed to suspend double-taxation treaties with so-called ‘unfriendly’ countries in response to Western sanctions, it was announced on Wednesday.

According to a statement published on the Finance Ministry’s Telegram channel, the economic restrictions imposed on Russia since 2022, along with the country’s inclusion on the EU blacklist of non-cooperative tax jurisdictions in February, “violates the norms of international law” and gives Moscow “grounds to impose retaliatory measures.”

The two ministries have suggested that President Vladimir Putin issue a decree suspending double-taxation treaties with all countries that have imposed sanctions on Russia until the country’s “violated rights are restored,” the statement reads.

Double-taxation treaties are agreements between states designed to protect against the risk of the same income being taxed twice in both countries. Russia has such agreements with many nations including EU member states, the UK, Australia, Canada, and the US, all of which have imposed sanctions on Moscow.

Should the ministries’ proposal be approved, tax exemptions under the double-taxation treaties will be suspended.

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