Евразийский научно-исследовательский центр сравнительного и международного финансового права

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Russian Double Taxation Conventions: Investments Opportunities and Anti-avoidance Provisions

Публикации > Книги и монографии

For the recent fifteen years the Russian Federation (RF) has pursued quite an active international fiscal policy; it has signed eighty-two conventions for the avoidance of double taxation with respect to taxes on income and on capital. At present, Russia has sixty-eight double taxation conventions (DTCs) in force;1 besides, sixteen DTCs have been negotiated and signed but not ratified by the RF Parliament yet.
Russian DTCs generally follow the Organization for Economic Cooperation and Development (OECD) model; however, special Articles in certain treaties concluded by Russia can be found. In principle, the Russian approach to DTCs is reflected in the model treaty approved by the RF Government Regulation of 28 May 1992 no. 352. The difference between it and the OECD model is not significant. For instance, one of the most remarkable points is that the RF model provides for less favourable conditions for at-source dividend taxation; in particular, the lowest rate for at-source dividend taxation (10%) is applied only if a company holds 100% of the capital of the company paying the dividends.
The influence of the RF model treaty (reproduced nearly word for word in the CIS (Commonwealth of Independent States). Recommendation of 15 May 1992 'On unification of tax treaties') on Russian tax treaty policy is, however, quite limited. It is symptomatic that there are no bilateral tax treaties, concluded by Russia, containing Articles which follow the above-mentioned provisions in regard to at-source dividend taxation. We can say that Russian DTCs are more in line with the OECD model than it is provided for by the model treaty approved by the RF Government.
It is important that the Roadmap for the accession of the RF to the OECD convention was adopted by the Council at its 1163rd session on 30 November 2007. The Roadmap stipulates the following:
(1) eliminating international double taxation on income and capital through complying with the key substantive conditions underlying the OECD Model Tax Convention;
(2) eliminating double taxation through ensuring the primacy of the arm's length principle;
(3) engaging in effective exchange of information;
(4) combating harmful tax practices.

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