What do amendments to the tax agreement with Malta mean for business in Russia?

What do amendments to the tax agreement with Malta mean for business in Russia?

It is not worth talking about any global changes for Russian business in connection with the revision of the double taxation agreement between Russia and Malta. This IA REGNUM September 11 said lawyer and managing partner of Tax Compliance Mikhail Begunov, commenting on the information that the Russian Prime Minister Mikhail Mishustin approved a draft protocol on amendments to the Convention for the avoidance of double taxation with Malta. Recall that earlier a similar document was signed with Cyprus.

"It is worth understanding that the revision of the agreement with Cyprus and Malta are slightly different things. Russia and Cyprus have traditionally had good relations in terms of tax cooperation, and this jurisdiction is very popular among Russian businesses. Malta cannot be compared with Cyprus in terms of the volume of transactions. Accordingly, it is impossible to talk about global changes," said Begunov.

He drew attention to the fact that Malta had previously been seen as a less attractive jurisdiction, particularly for obtaining a second citizenship, and that situation would not change. But the revision of this agreement, he said, is a sign to Russian business that Russia's tax interaction with foreign jurisdictions will change.

"Of course, the specific terms of revision of certain agreements will depend to a large extent on the degree of economic dependence of this or that country on Russian business operations. It means that not all countries will be able to agree on such favorable conditions as Cyprus," the expert added.

Recall that the revision of the agreements is being carried out in the framework of the order of Russian President Vladimir Putin, who in March 2020 pointed out the unfair taxation of income from offshore jurisdictions at rates below personal income tax.

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