Netherlands: Termination of income tax treaty with Russia

As of 1 January 2022, there will no longer be an income tax treaty between the Netherlands and Russia.

As of 1 January 2022, there will no longer be an income tax treaty

The Dutch Government on 7 June 2021 informed the Dutch Parliament that the Russian government officially gave a notice of termination of the income tax treaty between the Netherlands and Russia. Consequently, as of 1 January 2022, there will no longer be an income tax treaty between the Netherlands and Russia.

The notice of termination was the final step in a process to renounce the tax treaty. Read TaxNewsFlash (November 2020) and TaxNewsFlash (March 2021)

  • The final process started 12 April 2021 when the Russian government submitted a proposal to the Duma (the Russian Lower House of Parliament).
  • The Duma on 11 May 2021 passed the proposal.
  • The Russian Federation council on 19 May 2021 gave its approval and the measure was signed by the Russian president on 26 May 2021.

KPMG observation

The termination of the Netherlands-Russia income tax treaty could have adverse implications for mutual investments and business between both countries. For example, the full exemption from dividend withholding tax provided under Dutch national law will cease to apply, resulting in a 15% levy on dividend payments made by Dutch taxpayers to Russian shareholders.
 

Read a June 2021 report prepared by the KPMG member firm in the Netherlands

 

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