A new agreement on the avoidance of double taxation has been signed

The State Duma has approved the conclusion of an
agreement on the avoidance of double taxation with Oman. Now all persons and
companies registered in Russia or Oman will be taxed only in one of these
countries.  The document has been in
development since 2001, but its ratification was suspended by Russia in 2009
due to low tax rates and interest on income provided for in Oman. Full approval
was achieved only this November.

The agreement was officially approved and ratified on
November 29 and concerns, first of all, the elimination of double taxation with
respect to income and the prevention of tax evasion. All information was posted
on the website of the State Duma.

The document applies to taxes on total income or its
components and is valid for persons residing, registered or temporarily staying
in Russia or Oman. According to the statement posted on the website, this
agreement will help attract investments.

In June, it became known that Russia and the UAE had
also begun approving the parameters of the agreement. The Russian Ministry of
Finance is in the final stage of negotiations with the UAE. At a meeting in
Dubai on June 12, the parties agreed on the tax rates on dividends and interest
income – 15% and 10%, respectively. These figures exceed the domestic Russian
rates (15% and 20%). However, it has not yet been possible to agree on a
royalty rate.

Russia signs agreements on the avoidance of double
taxation with various countries in order to stimulate economic relations. In
addition to Oman and the UAE, Russia is also going to conclude similar
agreements with various Asian countries, some European countries and other
regions. Despite the fact that some agreements have been suspended, the
agreement on the avoidance of double taxation continues to partially operate
with the United States, Cyprus, Great Britain, Canada, the Czech Republic,
Poland, South Korea and Japan.