Russia will be able to suspend double tax treaties with countries that have imposed sanctions on it for invading Ukraine, including with member states of the European Union (EU), the Russian Finance Ministry said on Wednesday.
“The Ministries of Finance and Foreign Affairs of Russia proposed to the President of the Russian Federation to issue a decree on the suspension of agreements on the avoidance of double taxation with all countries that have imposed unilateral economic sanctions,” the ministry said in a statement.
In particular, he proposes to Vladimir Putin to suspend these agreements “until Russia’s violated rights are restored,” according to the Spanish agency EFE.
Russia has been subject to sanctions by several countries since it invaded Ukraine on February 24, 2022.
The ministry, headed by Anton Siluanov, said that in February of this year, the EU added Russia to the list of non-cooperative tax jurisdictions, the so-called “black list”.
“The unilateral imposition of restrictive measures is a violation of international law. Therefore, Russia has grounds for introducing retaliatory measures,” he explained.
If the two-ministry proposal is approved by Putin, the application of reduced withholding rates (tax breaks) on treaty income will be suspended from the time the decree is issued, Russia’s TASS news agency reported.
The Russian government submitted on March 8, 2022, after it became the object of the first sanctions, a list of “non-cooperative” countries and territories.
This list includes all EU Member States, USA, Canada, UK, Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, North Macedonia, Japan, South Korea, Australia, Micronesia, New Zealand, Singapore and Taiwan.
The Russian invasion of Ukraine plunged Europe into the worst security crisis since World War II (1939-1945).
Ukraine’s Western allies have consistently applied sanctions packages against Russia’s interests in an attempt to deprive Russia of funds to fund its war effort.
In addition to sanctions, Ukraine’s allies are supplying weapons to Kyiv.