| The new profits tax law which came into force in 2002 significantly
changed the withholding tax regime applying to Russian
source income paid to foreign companies without a
permanent establishment in Russia. The new withholding
tax regime is now much closer to OECD principles and
the previously extremely bureaucratic procedure for
obtaining advance treaty clearances has been much
simplified.
Tax treaties to which the former USSR was party are honored by Russia,
unless the other party to the treaty has renounced
it or it has been replaced by a new treaty. In the
last few years Russia has entered into many new treaties
based on the OECD Model Convention.
A foreign company claiming an exemption from Russian withholding
tax based on a treaty must obtain and provide to the
Russian payor a confirmation from the foreign tax
authority that the company is tax resident in the
relevant treaty country. The tax authorities have
clarified the information, which is necessary to confirm
the eligibility of the foreign company to the treaty
exemption in such a certificate.
 Table Of Treaty Rates
These rates
apply to withholding taxes on Russian source income.
Red numbers in parentheses refer to notes below the
table.
| Country |
Dividends |
Interest |
Royalties |
Year Of Application |
| Albania |
10 |
10 |
10 |
1998 |
| Armenia |
5/10 |
0 |
0 |
1999 |
| Austria |
5/15 (1) |
0 |
0 |
2003 |
| Australia |
5/15 |
10 |
10 |
2004 |
| Azerbaijan |
10 |
10 |
10 |
1999 |
| Belgium |
10 |
0/10 |
0 |
2001 |
| Belarus |
15 |
10 |
10 |
1999 |
| Bulgaria |
15 |
15 |
15 |
1996 |
| Canada |
10/15 (2) |
10 |
0/10 |
1998 |
| China |
10 |
10 |
10 |
1998 |
| Croatia |
5/10 |
10 |
10 |
1998 |
| Cyprus |
5/10 (3) |
0 |
0 |
2000 |
| Czech Republic |
10 |
0 |
10 |
1998 |
| Denmark |
10 |
0 |
0 |
1998 |
| Egypt |
10 |
15 |
15 |
2001 |
| Finland |
5/12 (4) |
0 |
0 |
2003 |
| France |
5/10/15 (5) |
0 |
0 |
|
| Germany |
5/15 (6) |
0 |
0 |
1997 |
| Hungary |
10 |
0 |
0 |
1998 |
| Iceland |
5/15 |
0 |
0 |
|
| India |
10 |
10 |
10 |
1999 |
| Indonesia |
15 |
15 |
15 |
2003 |
| Iran |
5/10 |
7.5 |
5 |
2003 |
| Ireland |
10 |
0 |
0 |
1996 |
| Israel |
10 |
10 |
10 |
2001 |
| Italy |
5/10 (7) |
10 |
0 |
1999 |
| Japan |
15/10 |
10 |
0/10 (8) |
1987 |
| Khazakhstan |
10 |
10 |
10 |
1998 |
| Korea |
5/10 (9) |
0 |
5 |
2001 |
| Kyrgyz Republic |
10 |
10 |
10 |
2001 |
| Kuwait |
5 |
0 |
10 |
|
| Lebanon |
10 |
5 |
5 |
2001 |
| Lithuania |
5/10 |
10 |
5/10 |
2006 |
| Luxembourg |
10/15 (10) |
0 |
0 |
1998 |
| Macedonia |
10 |
10 |
10 |
2001 |
| Malaysia |
15 |
15 |
10/15 |
1989 |
| Mali |
10/15 |
15 |
0 |
2000 |
| Morocco |
5/10 |
10 |
10 |
2000 |
| Moldova |
10 |
0 |
10 |
1998 |
| Mongolia |
10 |
10 |
0 |
1998 |
| Namibia |
5/10 |
10 |
5 |
|
| Netherlands |
5/15 (11) |
0 |
0 |
1999 |
| New Zealand |
15 |
10 |
10 |
|
| North Korea |
10 |
0 |
0 |
|
| Norway |
10 |
0/10 (12) |
0 |
2003 |
| Poland |
10 |
10 |
10 |
1994 |
| Portugal |
10/15 (13) |
10 |
10 |
2003 |
| Philippines |
15 |
15 |
15 |
2003 |
| Qatar |
5 |
5 |
5 |
2001 |
| Romania |
15 |
15 |
10 |
1996 |
| Serbia & Montenegro |
5/15 |
10 |
10 |
1998 |
| Slovak Republic |
10 |
0 |
10 |
1998 |
| Slovenia |
10 |
10 |
10 |
1998 |
| South Africa |
10/15 |
10 |
0 |
2001 |
| Spain |
5/10/15 (14) |
0/5 (15) |
5 |
2001 |
| Sri Lanka |
10/15 |
10 |
10 |
2003 |
| Syria |
15 |
10 |
4.5/13.5/18 |
|
| Sweden |
5/15 (16) |
0 |
0 |
1996 |
| Switzerland |
5/15 (17) |
5/10 (18) |
0 |
1998 |
| Syria |
15 |
10 |
4.5/13.5/18 |
|
| Tajikistan |
5/10 |
10 |
0 |
|
| Turkey |
10 |
10 |
10 |
2000 |
| Turkmenistan |
10 |
5 |
5 |
2000 |
| Ukraine |
5/15 (19) |
10 |
10 |
2000 |
| UK |
10 |
0 |
0 |
1999 |
| USA |
5/10 (20) |
0 |
0 |
1994 |
| Uzbekhistan |
10 |
0/10 |
0 |
1996 |
| Vietnam |
10/15 |
10 |
15 |
1997 |
Notes:
(1)
5% for 10% shareholders, otherwise 15%
(2) 10% for 10% shareholders, otherwise 15%
(3) 5% if initial investment greater than US$100,000,
otherwise 10%
(4) 5% for 30% shareholders, otherwise 12%
(5) 5% if investment not less than FFr 500,000 and
if the recipient pays tax; 10% if either is untrue;
otherwise 15%
(6) 5% for 10% shareholders, otherwise 15%
(7)
5% for10% shareholders, otherwise 10%
(8) 0% for royalties in respect of literary, artistic
or scientific works including films and tapes; 10%
for royalties in respect of any patent, trade mark,
design or model, plan, secret formula or process,
or industrial,
commercial or scientific equipment, or information
concerning industrial, commercial or scientific experience.
(9) 5% for 30% shareholders, otherwise 10%
(10) 10% for 30% shareholders, otherwise 15%
(11) 5% for 25% shareholders, otherwise 15%
(12) 0% for commercial loans in connection with a
delay of payment for goods, equipment and services;
otherwise 10%
(13) 10% for 25% shareholders, otherwise 15%
(14) 5% for participation of at least ECU100,000 and
if the dividends are exempt from tax in; 10% if either
condition is met; otherwise 15%
(15) 0% if the actual recipient of interest is the
government of the other contracting state, or for
long-term bank loans (exceeding 7 years); otherwise
5%
(16)
5% for 100% participation or 30% participation in
a joint venture; otherwise 15%
(17) 5% for 20% shareholders, otherwise 15%
(18) 5% for bank loans, otherwise 10%
(19) 5% for participation of at least US$50,000; otherwise
15%
(20) 5% for 10% shareholders, otherwise 10%
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