Double taxation agreements (TTDs) exist between many countries on a bilateral basis to avoid double taxation, i.e. the tax applied twice to the same income, profits, gain, estate or other elements. One of the most important provisions of the Russian double taxation conventions concerns stable institutions that can take the form of this: as a result of the Organisation for Economic Co-operation and Development Convention, Russia has included clauses on the exchange of tax information in its agreements. The Double Taxation Convention came into force on February 15, 1994. The main purpose of these contracts is to protect the investor from double taxation for the same income in two different countries and to prevent tax discrimination against a signatory country abroad. In particular, interest, royalties, pensions and dividends are subject to these double taxation agreements. The Russian Ministry of Finance estimates that 16 billion euros ($17.92 billion) of revenue generated in Russia in 2018 was diverted to Cyprus and 21.9 billion euros ($24.52 billion) in 2019. As a result, the loss of Russian tax revenue due to double tax relief is considerable. We can provide current and historical tax rates, comparison tables and country surveys through our specialized tax databases. We have current key summaries and detailed analysis of the tax system in countries around the world on corporate taxation, individual taxation, business and investment. In his speech on 11 August, Overchuk also indicated that Russia could propose amending tax agreements with Switzerland and Hong Kong. A foreign company can benefit from tax exemptions in Russia if it provides relevant evidence that it is already paying taxes in the country that is part of the contracts.
Information exchange contracts are signed between countries. Each year, the signatory states exchange lists of investors claiming to be exempt from different taxes on the basis of double taxation agreements. This list needs to be carefully considered and additional documents may be requested by investors. Malta, another island state, also agreed to a new protocol at its 2013 DBA. According to the protocol, the withholding rate is increased to 15 per cent on dividends and interest collected. Exemptions are granted for certain institutional investments. The agreement between Malta and Russia was signed on 13 August. Most Russian double taxation conventions contain provisions on stable establishment status that allow foreign companies to operate in various forms in that country.