Russia has sent a letter to Switzerland proposing an amendment to the double taxation agreement. This was announced by the Secretary of State – Deputy Finance Minister Alexei Sazanov at the Moscow Financial Forum, in response to a question from Vedomost.
“We have sent proposals to revise the agreement to our Swiss colleagues. We replied that they were ready to start negotiations with us in October, “Sazanov said.
Earlier, the government and the Ministry of Finance announced their intention to revise the tax agreements in Switzerland, Hong Kong and Singapore. In May, Russia broke its tax treaty with the Netherlands after the country refused to raise tax rates on dividends and interest.
Switzerland is a classic commercial jurisdiction. Russian trade and service companies are located there because of their convenient legislation and location for cooperation with European partners.
The tax agreement between Russia and Switzerland sets a rate of 5% dividends, a minimum 20% interest on participation and an investment of 200,000 francs; in other cases, a 15% rate on dividends, interest and rights – 0%.
Switzerland is not at all a typical transport jurisdiction, stresses Natalya Kuznetsova Deloitte, a member of the CIS Tax and Legal Department. The withholding tax on dividends is 35%. Negotiations can be similar, as was the case with the Netherlands, according to the expert: “There are a lot of direct investments from Switzerland related to real business, which means that they will fight for them.”
The Ministry of Finance has already agreed to agree on tax increases with Cyprus, Luxembourg and Malta. Conditions common to all countries: raising the tax rate on dividends and interest to 15%. There are exceptions when the tax rate is 5%.
Russia is canceling tax cuts that make capital gains more profitable. As a result, agreements with countries are being revised, where conditions allow for a reduction in the standard dividend rate from 5% to 10%, as well as a reduction in interest rates on loans from 20% to 0%. In general, the Ministry of Finance expects to receive about 150 billion rubles from the revision of DTT with “transition countries”. additional annual income.
With the possibility of a comfortable withdrawal of capital abroad closed, the Ministry of Finance expects to return to Russia, including the “Russian Sea” – special administrative regions (SAR) in Kaliningrad and Vladivostok. There, it is creating a tax regime almost equal to that of public jurisdictions.