The Parliament of the Kingdom of The Netherlands has been informed by their government on 7th June 2021 that the Russian government has officially given notice of termination of the Double Tax Treaty (DTT) between the two countries. Subsequently, the Treaty will no longer be in force as of 1st January 2022.
Termination of the Treaty is expected to cause significant economic impact with major changes in corporate taxation, including the dividend payments from Russia to the Netherlands being subject to withholding tax at 15% (instead of 5% under the Treaty), and the interest and royalties being taxed at 20% (instead of 0% under the Treaty).
As both countries stand to benefit from a DTT, the termination is not irreversible at this point and the issues can be resolved with continued mutual efforts by the end of 2021.
For more information on the implications of the elimination of the Double Tax Treaty between the Kingdom of The Netherlands and the Russian Federation, please contact us via email at [email protected]