Russia and Luxembourg have signed a protocol to amend the agreement on the avoidance of double taxation, according to the website of the RF Ministry of Finance.

      The Protocol defines the list of exceptions for the application of a preferential withholding tax rate of 5% on dividend and interest income. Withholding tax is a mandatory payment that is levied on non-residents who receive income in the state without a permanent establishment (for example, in the form of dividends, interest, royalties, etc.).

      The list of exceptions is similar to that given in the agreements with Cyprus and Malta, according to the Ministry of Finance. “It is important for us to concentrate financial resources in the country to implement measures to support the population and economy in the current situation. In addition to revising tax agreements this year, we are preparing a number of innovations aimed at deoffshorization of the Russian economy. We are developing changes to improve legislation in the SAR to make these jurisdictions more attractive for the transfer of international holding structures to Russia,” the State Secretary and Deputy Finance Minister Alexei Sazanov said.

      The revision of agreements with offshore companies began as part of the instructions of Russian President Vladimir Putin. In March, he indicated that with the help of offshore companies, they pay at rates lower than personal income tax.