Vladimir Putin has suspended double tax treaties with countries officially recognized by Russia as “unfriendly” after its invasion of Ukraine. This was requested by the Ministry of Finance and the Ministry of Foreign Affairs.
The Russian president today suspended double tax treaties with 38 countries, including 24 from the European Union, including Poland. The proposal came from the Ministry of Finance and the Ministry of Foreign Affairs, which proposed to respond in this way to the countries that imposed sanctions on Russia.
Russian regulations stipulate that the place of payment of the tax depends on the tax residence. If individuals are tax residents of another country, they are not taxed a second time in Russia. Russia has officially announced that the termination of double taxation agreements will not affect the rights of these persons, but the provisions read directly state otherwise. Russians working abroad will have to pay taxes twice – at the workplace and in Russia.
“Kommersant” reports that Russian business may also suffer from the suspension of contracts. The newspaper claims that Russian companies still operating in the countries with which Russia has suspended contracts today will pay 15-40 percent. higher taxes. The suspension of contracts will have no impact on international business, as most international companies have already resigned from operating in Russia.
A ruble worth one cent
Russia now has a serious problem: the ruble exchange rate is scouring the bottom. The Russian currency has not been so weak since Vladimir Putin started his criminal war in Ukraine. However, the collapse of March last year was stopped by the very aggressive monetary policy of the central bank of Russia. Overnight, it was decided to save the ruble, the stock exchange in Moscow was closed and further attempts were made to stay “afloat”. With each subsequent month, the Kremlin tried new moves.
After the introduction of further sanctions, which cut off Russian banks from the international SWIFT payment system, Putin’s decree obliged oil and natural gas companies to accept payments only in rubles. Any country that did not agree to this was immediately cut off from supplies.