Russia to Revise Double Taxation Agreement with Switzerland

Next month, Russia and Switzerland will begin to change the agreement on the avoidance of double taxation to reduce the withdrawal of capital from the Russian Federation to the “tax haven”, Russian Finance Minister Anton Siluanov said.

The Ministry of Finance has already sent a proposal to Switzerland to revise the tax agreement. “We will have an intergovernmental commission in the next month,” Siluanov said.

Such agreements were in force with many countries. But the double tax treaty – so that the same income in different countries is not taxed twice – has become a convenient loophole for complete tax evasion.

For example, according to the agreement, the income of Russian citizens is not taxed in Russia when money is transferred to another country, but they also do not take tax there to attract as much money as possible from wealthy Russians.

In March last year, Russian President Vladimir Putin proposed to introduce a tax of 15% on income in the form of dividends and interest, which are transferred from the Russian Federation to accounts abroad. For this, they began to adjust agreements with other countries.

The President of the Russian Federation said that Russia is ready to withdraw from agreements with countries that will not accept these proposals. Malta, Cyprus and Luxembourg decided to revise the agreement. The Netherlands opposed and the Russian Federation terminated the agreement, Russian media added.