Elimination of double taxation: Russia has chosen the method of tax deduction as it is now (the same as in most TDRs with Russia). Most Russian double taxation conventions provide for the following mechanisms to avoid double taxation: the role of double taxation conventions is to control how profits are taxed in different countries. There are two ways to benefit from double taxation exemptions: without tax deduction or with a deduction from a reduced rate, as agreed in the double taxation agreement. The main purpose of these contracts is to protect the investor from double taxation for the same income in two different countries and to prevent tax discrimination against a signatory country abroad. In particular, interest, royalties, pensions and dividends are subject to these double taxation agreements. Most Russian double taxation conventions contain provisions for the following elements that constitute taxable income, such as.B.: search for tax rates, the latest tax news and information on double taxation agreements with our specialized online resources, guides and useful links. The Double Taxation Convention came into force on February 15, 1994. As a result of the Organisation for Economic Co-operation and Development Convention, Russia has included clauses in its agreements on the exchange of tax information. Most Russian double taxation conventions contain provisions on stable establishment status that allow foreign companies to operate in various forms in that country. Under this status, foreign companies can benefit from advantageous tax conditions.
A foreign company can benefit from tax exemptions in Russia if it provides relevant evidence that it is already paying taxes in the country that is part of the contracts. Information exchange contracts are signed between countries. Each year, the signatory states exchange lists of investors claiming to be exempt from different taxes on the basis of double taxation agreements. This list needs to be carefully considered and additional documents may be requested by investors. Since 2002, when the new Income Tax Act came into force, it has changed the tax regime of foreign companies operating in Russia. The old, highly bureaucratic procedure is now being replaced by a very simplified procedure that allows investors to use the double taxation agreements that Russia has signed with different countries more quickly over the years.