Context: treaty network before 2023
By the early 2020s, Russia was party to approximately eighty tax treaties—a dense network built since the mid-1990s. The logic of any such treaty is simple: two states share the right to tax the same income and limit withholding tax at source. Under treaties, dividends were typically taxed at 5–10% instead of the domestic 15%, interest and royalties often fell to 0–10%, and residents received credit for tax paid abroad. This is precisely what made classic holding chains through Cyprus, the Netherlands, and Luxembourg cheap and predictable.
The network began changing even before 2023. In 2020–2021, the Ministry of Finance revised treaties with Cyprus, Malta, and Luxembourg, raising the rate on dividends and interest to 15% and closing the most aggressive profit extraction schemes. After the events of 2022, the approach pivoted: instead of targeted treaty amendments, the state moved to freeze them with respect to countries Russia classified as unfriendly. The culmination was Decree No. 585.
Concept
On August 8, 2023, by Presidential Decree No. 585, Russia unilaterally suspended the key provisions of double tax treaties (DTTs) with 38 "unfriendly" states—including the USA, EU countries, the United Kingdom, Japan, and Korea. Legally, the treaties remain in force, but their operative articles ceased to apply.
DTTs exist for a simple purpose: to allocate the right to tax the same income between two countries and prevent it from being taxed twice. The decree froze precisely these mechanisms.
How it came to suspension
The suspension did not appear out of nowhere. After February 2022, the European Union and individual states wound down tax dialogue with Moscow, and on February 14, 2023, the EU Council added Russia to its list of non-cooperative jurisdictions—formally for failure to meet commitments on the international holding company regime and cessation of dialogue on tax matters. For Brussels, this meant Russia was no longer considered a good-faith partner in exchanging and coordinating tax rules.
Moscow responded symmetrically. In spring 2023, the Ministry of Finance and Ministry of Foreign Affairs jointly proposed freezing DTTs with states that had imposed unilateral restrictions against Russia, and on August 8 this was formalized by Decree No. 585. Legally, a soft instrument was chosen—suspension. Unlike denunciation, treaties remain in the international legal sphere and can return to life once political relations normalize.
What was suspended
The suspension covered articles that allocated taxing rights and provided reduced withholding tax rates—on dividends, interest, royalties, and capital gains. The list varies for each treaty: for example, under the agreement with the USA, paragraph 4 of Article 1 and Articles 5-21 and 23 were suspended. Only certain procedural provisions such as information exchange and mutual agreement procedures survived.
The set of treaties is fixed by the decree itself: all 38 agreements are listed by name in its Article 1, and the decree makes no reference to Government Order No. 430-r of 5 March 2022. These are two different lists and they do not fully coincide: the register of unfriendly states under Order No. 430-r also covers countries whose treaties are absent from the decree — Latvia, Estonia, Ukraine, Monaco, the Bahamas. Availability of a treaty rate at source is therefore checked against Article 1 of Decree No. 585, not against the Order No. 430-r register; conflating the two lists is a standard routing error.
Consequences for payments from Russia
The practical effect was immediate: payments from Russia to residents of unfriendly countries from August 8, 2023, are subject to withholding tax at Russian Tax Code rates, without treaty benefits. For payments to foreign companies, this means 15% on dividends and 25% on interest and royalties (Articles 284 and 309–310 of the Tax Code); the former treaty rates of 5% or 0% no longer apply. The rate on a foreign company's other Russian-source income rose from 20% to 25% with effect from 1 January 2025 (Article 284(2)(1) of the Tax Code, as amended by Federal Law No. 176-FZ of 12 July 2024): payments for 2023–2024 are taxed at 20%, payments from 2025 at 25%. For non-resident individuals, dividends from Russian companies are taxed at 15%, and most other income sourced in Russia at 30% (Article 224(3) of the Tax Code). The official reference point for each treaty is the Russian Ministry of Finance status table, "Information on the status of double tax treaties", latest revision as at 14 July 2026, which records for every country which articles are suspended and whether the partner has confirmed a reciprocal step. The table sets out the Russian side of the question, so steps by partners that switched a treaty off in full have to be checked against their own instruments: for the United Kingdom, the Double Taxation Relief (Russian Federation) (Revocation) Order 2025 (SI 2025/344); for Germany, the Federal Ministry of Finance statement of 9 July 2026. The suspension reaches payments made on or after 8 August 2023 — anything paid earlier is untouched. The temporary reliefs of Federal Law No. 539-FZ of 27 November 2023 — preserving the source exemption for income that was untaxed under the treaties before the decree (Article 310(2)(11) of the Tax Code) — had not closed by 2026: as amended by Federal Law No. 425-FZ of 28 November 2025, the exemption for interest paid to independent foreign export-credit agencies and banks under contracts concluded before 8 August 2023 runs to 1 January 2036, and the exemption for aircraft leasing, broadcasting rights, royalties and international carriage to 1 January 2029. These reliefs never extended to dividends paid to private owners — there the 15% rate applied from the outset. The suspension is only one layer of a sanctions perimeter that hits the same payments from other directions; how those layers stack up is set out in the map of the sanctions cluster.
What the tax agent must confirm before payment
Entitlement to a reduced rate under a live treaty is established before the payment, not after it. Article 312 of the Tax Code requires the foreign recipient to give the tax agent, in advance, a certificate of tax residence in the treaty country and confirmation of beneficial ownership of the income. Without those documents the agent withholds at the domestic rate, and recovering the overpayment becomes a separate and slow procedure. Incorporation in a treaty country is not by itself enough: an intermediate vehicle with no staff, functions or risks creates no entitlement.
Where relief is unavailable at the level of the intermediate company, the look-through approach remains — Article 7(4) of the Tax Code: tax is computed as though the income had been received directly by the person beneficially entitled to it, and that person's treaty applies. For a Russian owner who closes the chain on himself this usually means the non-resident individual rate — the same 15% on dividends — while CFC rules arise in parallel on the foreign company itself. The look-through approach delivers a real saving only where the ultimate recipient is resident in a friendly jurisdiction with a treaty still in force.
A separate exposure is transfer-pricing adjustment. If the price in a transaction between related parties departs from the market level and the tax authority adjusts the base, the amount of the adjustment in favour of the non-resident is treated as a dividend and taxed accordingly. Intra-group loans, royalties and service fees are therefore built on an arm's length basis: an under- or over-stated price turns unexpectedly into a taxable dividend, at a rate the treaty no longer reduces.
Mirror response and the US case
Partners responded symmetrically. In the case of the USA, the Treasury suspended the same articles of the treaty and Protocol from August 16, 2024 (Announcement 2024-26), and US treaty benefits no longer apply. This created a rare case of mutual freeze: both states simultaneously withdrew mutual tax concessions.
Response from other partners
The symmetry with the USA was not unique. Some unfriendly countries officially confirmed reciprocal suspension: France by note of 12 February 2024, with retroactive effect from 8 August 2023; the Czech Republic by note of 13 September 2023, declining to apply the articles frozen by Russia from 11 August 2023. For Austria, no reciprocal note is recorded in the Russian Ministry of Finance register — the Austrian step should be checked against Austrian sources. Two partners answered not with a mirror freeze of individual articles but by switching the treaty off entirely. The United Kingdom announced on 4 February 2025 that it was suspending the 1994 Convention in full, and revoked the domestic instrument giving it effect: the Double Taxation Relief (Russian Federation) (Revocation) Order 2025 (SI 2025/344, made 12 March 2025) revoked the Double Taxation Relief (Taxes on Income) (Russian Federation) Order 1994 (SI 1994/3213), and the Convention ceased to have effect in the UK for the financial year beginning 1 April 2025 for corporation tax and for the 2025-26 tax year for income tax and capital gains tax. Germany notified Russia on 30 June 2026 that the Agreement of 29 May 1996 between the Federal Republic of Germany and the Russian Federation for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, together with its Protocol of the same date as amended by the Protocol of 15 October 2007, is suspended with effect from 1 January 2027 (Federal Ministry of Finance statement of 9 July 2026). In both pairs the whole treaty is off, not merely the distributive block: exchange of information, the mutual agreement procedure, the residence tie-breakers and the article on elimination of double taxation do not survive either — already in the British pair, and from 2027 in the German one. Two further treaties were terminated outright, but by different hands: the Denmark convention was denounced by Denmark itself (note of 19 June 2023), while the Latvia treaty was denounced by Russia, under Federal Law No. 40-FZ of 28 February 2023; both ceased to have effect on 1 January 2024, and Latvia is not on the Decree 585 list. The picture is varied—in some cases the same articles frozen by Russia are frozen, in others the treaty is terminated entirely, and in still others the partner has so far formally remained silent. Tax agents must verify the status for each country separately.
Double taxation for Russian residents
For a Russian resident receiving income abroad, the risk is reversed—double taxation. The suspension affected the distributive articles of treaties, but the article on elimination of double taxation was generally left in force. In the US pair both sides froze the identical list — paragraph 4 of Article 1, Articles 5–21 and 23 of the 1992 treaty and its accompanying Protocol (Decree No. 585; on the US side Announcement 2024-26, from 16 August 2024) — and Article 22 on relief from double taxation is not on that list.
But calling the result a domestic credit is accurate only for companies. Article 311(3) of the Tax Code credits tax paid by a Russian organisation under the law of a foreign state without any reference to a treaty — a genuinely unilateral rule. For individuals the provision is built the other way round: under Article 232(1) of the Tax Code amounts actually paid abroad "are not credited against tax payable in the Russian Federation unless the relevant international tax treaty of the Russian Federation provides otherwise". It is the treaty, not the Code, that creates an individual's right to a credit, so a suspended article on the elimination of double taxation takes the credit with it. Dividends are the one carve-out: Article 214(2) of the Tax Code asks only that a treaty has been concluded with the source state, and suspension does not terminate a treaty. On other income in the US pair the answer is contested: Article 22 formally lives, but paragraph 4 of Article 1 is suspended, and that paragraph was precisely what carved Article 22 out of the saving clause in paragraph 3 of Article 1; EY reads this as killing the treaty credit, and as at August 2026 there is no official Ministry of Finance or Federal Tax Service guidance either way. The credit is claimed on a return within three years (Article 232(2)) and only against the supporting documents required by Article 232(3). But credit does not cover all situations: abroad, the withholding rate returns to the high domestic rate (in the USA—30%), and credit is limited to the amount of Russian tax on the same income and does not refund overpayment if the foreign rate is higher. Where the treaty previously simply eliminated withholding tax at source, a cash gap and actual double taxation now arise. The specific calculation depends on the type of income and country and requires individual verification.
How this hits private structures
Classic cross-border structures feel the blow most acutely. Dividends that flowed from a Russian company to an EU or UK holding at a rate of 5 or 10 percent are now subject to full 15 percent withholding without refund. Interest on intra-group loans and royalties for licenses, previously often reduced to 0–5 percent, now fall under 25 percent — 20 percent for payments made before 1 January 2025. Capital gains from the sale of shares in companies whose assets consist predominantly of Russian real estate also lose treaty protection. An intermediate holding that existed for treaty benefits becomes a redundant link: for family holdings, the former ownership structure with a European layer suddenly became more expensive, and the owner must recalculate whether it is justified.
For individuals, the logic is similar. A Russian resident with dividends on US stocks or rental income in Europe faces increased tax abroad and limited credit at home; the choice then comes down to transferring the asset, changing the ownership structure, or reconsidering one's own tax residency.
Responses are built along several lines. Some transfer the intermediate holding to friendly jurisdictions—UAE, Hong Kong, Kazakhstan—or redomicile the company to Russian Special Administrative Regions (SARs) with their reduced regime for international companies; passive flows are redirected through jurisdictions where the treaty remains in effect. Some change personal tax residency, calculating exit taxes and consequences of relocation from Russia in advance. At the same time, any such structure must withstand the substance test, and CFC rules remain: changing the holding's flag does not relieve the Russian beneficiary of the obligation to report a controlled foreign company—otherwise savings turn into additional assessments.
What still continues to work
The freeze under Decree No. 585 affected distributive and rate articles, but not the entire treaty. Outside the scope of suspension remain provisions on exchange of tax information, mutual agreement procedure, determination of residence, and—formally—on elimination of double taxation. The caveat matters: this holds for pairs where the partner either stayed silent or mirrored the freeze on the same articles. Where the treaty has been switched off in full, the procedural framework goes with it — Denmark and Latvia (treaties terminated on 1 January 2024), the United Kingdom (Convention suspended in full from April 2025) and Germany (Agreement suspended in full from 1 January 2027). The legal framework for information interaction is preserved, although practical exchange with a number of countries is hampered; the status of automatic exchange under CRS should be checked for each jurisdiction separately. How the foreign tax credit works — and why for individuals it rests on the treaty itself — is covered above, in the section on double taxation.
Evolution: where the treaty map is shifting
First, the suspension was formalized by decree, then enshrined in law: Federal Law No. 598-FZ of December 19, 2023, moved the decision from the plane of a presidential act to the plane of law. The regime operates indefinitely—until relations normalize, and a quick return to former rates is not expected.
In parallel, Russia is building out its treaty network toward friendly jurisdictions. A telling example is the new agreement with the UAE — the Agreement between the Government of the Russian Federation and the Government of the United Arab Emirates for the Elimination of Double Taxation with respect to Taxes on Income and on Capital and the Prevention of Tax Avoidance and Evasion, signed on 17 February 2025, ratified by Federal Law No. 189-FZ of 7 July 2025 and in force since 18 July 2025. The UAE appears neither on the Decree 585 list nor on the register of unfriendly states (Government Order No. 430-r), so the suspension regime does not extend to this treaty: it applies in full, not in part. Under its Article 31 both groups of taxes switch on from the same date — taxes withheld at source, for amounts paid or credited on or after 1 January 2026; other taxes on income and on capital, for tax periods beginning on or after 1 January 2026 (Russian Ministry of Finance information notice of 3 December 2025). Withholding is capped at 10% on dividends (Art. 10), interest (Art. 11) and royalties (Art. 12) where the recipient is the beneficial owner, with a full exemption for payments to the other Contracting State and its financial and investment institutions. The earlier agreement of 7 December 2011, which covered only the investment income of the two states and their financial institutions, ceases to have effect from the date the new one begins to apply. This is the first full-fledged tax treaty between the countries, covering both business and individuals, and it sets a template for future agreements: after the UAE, Russia is negotiating with other friendly partners in the Gulf and Asia, and the tax map for Russian capital is being restructured toward the Gulf, Asia, and neutral countries.
Information exchange is also narrowing: automatic exchange (CRS/AEOI) with a number of unfriendly countries has been curtailed, so transparency in those directions is falling simultaneously with the disappearance of benefits. Where a treaty still operates, protection remains conditional on anti-abuse rules—MLI and treaty shopping. For owners, the bottom line is simple: the cost of cross-border passive flows to unfriendly countries has risen structurally, and planning is shifting to friendly hubs and domestic regimes like SARs. Structures should be planned on the assumption that the current regime is here to stay.
Q/A
Suspension or denunciation — does my treaty still exist at all?
Suspension, not denunciation. Decree No. 585 of 8 August 2023 froze the distributive articles — the reduced withholding on dividends, interest and royalties — while the treaties themselves remain in force, so exchange of information, the mutual agreement procedure and the residence tie-breakers continue to operate. Two treaties did end outright, and by different hands: Denmark denounced its own convention, Russia denounced the Latvia treaty, and both ceased to have effect on 1 January 2024. Two more were suspended in full by the partner rather than article by article — the United Kingdom from April 2025 and Germany from 1 January 2027 — and in those pairs nothing survives, procedural articles included.
What rate applies now to dividends and royalties paid out of Russia?
The full domestic Tax Code rates, with no treaty relief. Payments to foreign companies are taxed at 15% on dividends and 25% on interest and royalties (Articles 284 and 309–310); a foreign company's other Russian-source income rose from 20% to 25% with effect from 1 January 2025 under Federal Law No. 176-FZ. For non-resident individuals, dividends from Russian companies are taxed at 15% and most other Russian-source income at 30% (Article 224(3)).
Is the Singapore–Russia double tax treaty still in force after the suspension wave?
Yes as an instrument, no as a relief route: Singapore is on the Decree 585 list (item 36), so the treaty itself survives — exchange of information, mutual agreement procedure, residence tie-breakers — but its distributive articles (5–22 and 24, plus protocol provisions) are suspended and the reduced dividend, interest and royalty rates are gone; Russian-source payments fall back to full domestic withholding (15% on dividends). The "Singapore not listed, treaty unchanged" reading is wrong.
Can I still credit foreign tax against Russian tax?
As of right only if you are a company. Article 311(3) of the Tax Code gives a Russian organisation a unilateral credit with no treaty required. For an individual the rule runs the other way: under Article 232(1) foreign tax "is not credited against tax payable in the Russian Federation unless the relevant international tax treaty of the Russian Federation provides otherwise" — the treaty creates the right, so where the article on the elimination of double taxation is suspended the credit goes with it. Dividends are the carve-out: Article 214(2) asks only that a treaty has been concluded with the source state. In the US pair Article 22 was left off both suspension lists, but paragraph 4 of Article 1 — the paragraph that carved Article 22 out of the saving clause — was suspended by both sides, so the point is contested and unresolved as at August 2026. Either way the credit is capped at the Russian tax on the same income, so a higher foreign rate is not refunded.
Does the suspension reach the UAE?
No. The UAE appears neither on the Decree 585 list nor on the register of unfriendly states, so the new agreement of 17 February 2025 — ratified by Federal Law No. 189-FZ of 7 July 2025 and in force since 18 July 2025 — applies in full from 1 January 2026. Withholding is capped at 10% on dividends, interest and royalties where the recipient is the beneficial owner. It replaces the narrow 2011 agreement, which covered only the two states' investment income.