Moscow has rejected the British government’s plea to reverse its decision on double taxation agreements with “unfriendly states.” In a statement released by the Ministry of Finance on Saturday, Moscow stated that it will not fulfill its part of the agreements unilaterally until the sanctions imposed by Western countries are lifted.
Earlier this month, Russian President Vladimir Putin signed a decree suspending certain provisions of tax treaties with the United States, several EU countries, and other nations deemed “unfriendly.” In response, the British government urged Russia to reconsider its decision, emphasizing the seriousness of the issue. London argued that the UK-Russia Convention does not permit such unilateral action.
In its statement, the Russian ministry highlighted several breaches by the “unfriendly states” and the UK in particular. These breaches included Russia’s addition to the EU Blacklist of non-cooperative jurisdictions for tax purposes, refusals to issue confirmations of permanent residence in foreign countries to Russian residents, and the suspension of tax information exchange with Russia.
“The partial suspension of tax agreements with unfriendly countries provided for by the Decree will remain in effect until the rights of the Russian side are restored or the agreements are denounced,” stated the ministry. It emphasized that the Vienna Convention on the Law of Treaties allows for the suspension of agreements and their provisions if another country’s rights have been violated.
Double-taxation treaties are designed to prevent the same income from being taxed twice in two different countries. In total, Moscow has suspended double-taxation agreements with 38 countries, including the UK, Canada, Switzerland, Japan, and various EU member states that have imposed sanctions against Russia.
Nevertheless, the Russian government has instructed relevant authorities to take measures to minimize the impact of the suspension of tax treaties on the country’s economy.
It is worth noting that Western countries, including the UK, have been imposing unilateral economic and other restrictive measures against Russia. Moscow’s decision to suspend tax agreements with these nations is a response to these actions. The Russian government believes that until these sanctions are lifted, it is justified in withholding its compliance with the double taxation agreements.
By suspending these agreements, Moscow is seeking to protect its economic interests and ensure that its rights are restored. The Russian government hopes that this move will encourage the UK and other “unfriendly states” to reconsider their actions and engage in constructive dialogue to resolve the existing conflicts.
The Russian Ministry of Finance has made it clear that the suspension of tax agreements is a temporary measure and is contingent upon the restoration of its rights or the denouncement of the agreements. They believe that this action is within their rights under international law.
The impact of this decision on the Russian economy is a concern for the government, and measures will be taken to mitigate its effects. The Russian authorities will work to minimize any adverse consequences and protect the interests of their citizens and businesses.
It remains to be seen how the UK and other affected countries will respond to Moscow’s rejection of their plea. The resolution of this dispute will depend on the willingness of all parties involved to engage in constructive dialogue and find mutually acceptable solutions.
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