The Russian President, Vladimir Putin, has signed on August 8, 2023 an executive order (Presidential Decree 585) suspending certain provisions of tax agreements (DTA) with several countries that Russia has designated unfriendly.
This follows the Russia’s Finance Ministry and Foreign Ministry’s proposal in March 2023.
Therefore, Article 5 to 22, 24 and 25b of the Agreement between the Russian Federation and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income and capital of November 15, 1995, as well as paragraph 3 to 6 of the Protocol thereto are suspended. This includes property income in Russia, withholding tax provisions, corporate profits, dividends, capital gains, interests, pensions and other relief.
Individuals and companies with performing assets or operations in Russia should pay strict attention to this decree as it takes immediate effect, even if the Swiss authorities have not been yet formally informed of this decision (paragraph 4 of this decree provides the entry into force on the day of its publication). The government of Russia will now submit a draft federal law to the State Duma.
As a likely consequence of this decree, Russian capital held overseas may be transferred into new jurisdictions, especially to Dubai, Saudi Arabia, and Hong Kong.
Should you need any assistance on this matter, please do not hesitate to contact Mr. Claude-Alain Boillat.