In April 2019, Russia ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (the “Convention”). Starting from 2020, this document should be referred to when dividends, interest and royalties are paid to countries that have ratified the Convention.
Starting from 2020, in addition to the provisions that are already included in double tax treaties, the following condition should be complied with when dividends are distributed: the period of holding membership interests (shares) in a company should be at least 365 calendar days, including the day when the dividends are paid. Russia will extend the rule to certain double tax treaties with such countries as the Netherlands, Spain and France.
For Russia, the Convention will come into effect starting from 1 October 2019 and will bring several more provisions into force:
A number of countries such as the UK, Ireland, Israel, Luxembourg, Malta, the Netherlands, the UAE, Poland, Serbia, Singapore, Finland and France have already ratified the Convention. Several more countries are expected to also ratify it by the end of the year.
Please contact Acsour’s specialists for advice on the proper taxation of payments made abroad.