Termination of the double tax treaty between the Netherlands and Russia
Today, the Dutch Government informed Parliament that the Russian government officially gave a notice of termination of the double tax treaty to the Dutch government. Consequently, as of 1 January 2022, there will no longer be a double tax treaty between the Netherlands and Russia.
The termination process
The notice of termination was the final step in the legislative process to denounce the double tax treaty. This process started on April 12, 2021 when the Russian government submitted the legislative proposal to the Duma, the Russian Lower House of Parliament. On May 11, 2021 the Duma passed the legislative proposal. Subsequently, on May 19, 2021 the Federation council agreed on the legislative proposal and the bill was signed by the Russian president on May 26, 2021.
Termination of the double tax treaty
The termination of the double tax treaty could have an adverse impact for mutual investments and business between both countries. For example, the full exemption from dividend withholding tax provided under Dutch national law will cease to apply, resulting in a 15% levy on dividend payments made by Dutch taxpayers to Russian shareholders. We have elaborated on this in more detail in the previous iterations of this news item.
For more information, or if you would like to discuss the potential implications that this might have for you or your business, please contact the members of Meijburg & Co’s Russia/CIS Desk: Jens Karreman, Kevin van Heesch and Joep Verhoeven or Alexander Tokarev of KPMG Russia.