# Suspension of Tax Treaties by Russia: Consequences > Presidential Decree No. 585 of 08.08.2023 suspended tax treaties with 38 countries: payments from Russia at Tax Code rates, US mirror response, double taxation, and new UAE treaty. Author: Алёна Дунаева — юрист, Family Office (https://wiki.private.law/authors/dunaeva) Last modified: 2026-07-21T09:57:00.000Z Canonical: https://wiki.private.law/en/russia-tax-treaties-suspension Topics: investments Jurisdictions: russia Semantic tags: tax-regime --- ## Context: treaty network before 2023 > 🔗 **Related** > [unfriendly countries](https://wiki.private.law/en/unfriendly-countries-for-russia) 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](http://www.kremlin.ru/acts/bank/49700). ## 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. > 💡 **Short answer.** Presidential Decree No. 585 of 8 August 2023 suspended — but did not denounce — key articles of Russia's double tax treaties with 38 "unfriendly" countries, and the distinction is the whole doctrine: the distributive articles (reduced withholding on dividends, interest, royalties) are frozen, while the treaties themselves live on — exchange of information, mutual agreement procedure, residence tie-breakers and the foreign-tax credit under Articles 232/311 of the Tax Code all survive. Counterparties answered asymmetrically: the United States mirrored the suspension from 16 August 2024, France, Czechia and Austria took their own measures, while Denmark and Latvia chose full denunciation. Treaties with states outside the Decree 585 list — Hong Kong among them — apply unchanged, while Singapore is on the list (item 36), and the renewed Russia–UAE treaty applies from 1 January 2026. For structures the practical map is: flows to listed jurisdictions lost treaty relief and fall back to full domestic withholding; routes through non-suspended partners keep relief but must pass beneficial-ownership and substance scrutiny. Per-country statuses move fast — verify the current pair status before each payment. ## 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](https://www.consilium.europa.eu/en/press/press-releases/2023/02/14/taxation-british-virgin-islands-costa-rica-marshall-islands-and-russia-added-to-eu-list-of-non-cooperative-jurisdictions-for-tax-purposes/)—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. > 🧭 Suspension and denunciation are different regimes. With denunciation, a treaty terminates, and its restoration requires new ratification. Suspension merely freezes certain articles: the treaty itself remains in force, and lifting the freeze is technically simpler. ## 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. ## 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 20% on interest and royalties (Articles 284 and 309–310 of the Tax Code); the former treaty rates of 5% or 0% no longer apply. For non-resident individuals, dividends from Russian companies are taxed at 15%, and most other income sourced in Russia at 30%. Guidance on applying the decree was provided by the Federal Tax Service in Letter ShYu-4-13/14936@ of November 29, 2023. How withholding tax on dividends now works is covered in the article on [tax on dividends from Russia](https://wiki.private.law/en/russia-dividends-tax). ## 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](https://www.irs.gov/irb/2024-27_IRB#ANN-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—from August 8, 2023, the Czech Republic refused to apply articles frozen by Russia from August 11, 2023, Austria—from December 6, 2023. Several states went further and completely terminated treaties: Denmark and Latvia denounced their DTTs, and these agreements ceased to apply from January 1, 2024. 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 case, this is directly visible: the US Treasury froze Articles 5–21 and 23 of the 1992 treaty, leaving Article 22 on credit untouched. Therefore, the main safeguard remains domestic credit: tax withheld abroad can still be credited against Russian tax—for individuals under Article 232, for organizations under Article 311 of the Tax Code, provided supporting documentation requirements are met. 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. > 💡 Credit for companies (Art. 311 Tax Code) and for individuals (Art. 232) is structured differently: organizations have broader access, while for individuals much depends on whether the specific treaty preserves the article on elimination of double taxation. Specifics for your country and type of income should be checked separately. ## How this hits private structures > 🔗 **Related** > [ownership structure](https://wiki.private.law/en/holding-structures) · [exit taxes](https://wiki.private.law/en/exit-taxes-overview) · [relocation from Russia](https://wiki.private.law/en/relocation-from-russia) · [CFC](https://wiki.private.law/en/kik) 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, fall under 20. 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 > 🔗 **Related** > [CRS](https://wiki.private.law/en/crs-overview) The freeze 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 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 domestic foreign tax credit works is covered above, in the section on double taxation. > 💡 Practical takeaway for tax agents: before each cross-border payment, verify three things—whether the country is on the list of Decree No. 585, which specific articles are suspended in the particular treaty, and whether the partner has confirmed a reciprocal step. There is no ready answer "by general list" here. ## Evolution: where the treaty map is shifting > 🔗 **Related** > [UAE agreement](https://wiki.private.law/en/uae-tax-residency) · [MLI and treaty shopping](https://wiki.private.law/en/mli-treaty-shopping) · [Loss of Russian tax residency](https://wiki.private.law/en/russia-tax-residency-exit) · [Russian currency residency and reporting](https://wiki.private.law/en/russia-foreign-account-reporting) · [Relocation from Russia](https://wiki.private.law/en/relocation-from-russia) · [Exit taxes—overview](https://wiki.private.law/en/exit-taxes-overview) · [CFC](https://wiki.private.law/en/kik) · [Unfriendly countries for Russia](https://wiki.private.law/en/unfriendly-countries-for-russia) · [SAR: redomiciliation](https://wiki.private.law/en/russia-sar-redomicile) First, the suspension was formalized by decree, then enshrined in law: [Federal Law No. 598-FZ](http://kremlin.ru/acts/bank/50132) 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: signed February 17, 2025, entered into force July 18, 2025, and applies from January 1, 2026, with a uniform 10% rate on dividends, interest, and royalties when the recipient has beneficial ownership of the income. 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. > 🧭 Practical guideline: check each payment chain for an active treaty, recalculate withholding tax at domestic rates, and assess whether credit is preserved for your country. Where a treaty is frozen—solutions are sought through redomiciliation to SARs, friendly jurisdictions, or change of residency. > 🍓 Decree No. 585 froze DTT benefits with 38 countries, the USA responded in mirror fashion from August 2024, and cross-border payments are now taxed at domestic rates. Russia's treaty network is shifting toward friendly jurisdictions—the new agreement with the UAE is effective from 2026. ## FAQ ### **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. *This material is an expert overview and does not constitute individual tax advice. Russian regulation is changing rapidly; rates, the list of suspended articles, and credit mechanics should be verified against the current version of the Tax Code, Decree No. 585, and Federal Tax Service guidance.* --- *Reviewed: 2026-07-20 · Sources: Decree No. 585 (*[*kremlin.ru/acts/bank/49700*](http://kremlin.ru/acts/bank/49700)*); Federal Law No. 598-FZ (*[*kremlin.ru/acts/bank/50132*](http://kremlin.ru/acts/bank/50132)*); IRS Announcement 2024-26; *[*nalog.ru*](http://nalog.ru/)*.* Cite as: [wiki.private.law](http://wiki.private.law/) — "Suspension of Tax Treaties by Russia: Consequences", [https://wiki.private.law/en/russia-tax-treaties-suspension](https://wiki.private.law/en/russia-tax-treaties-suspension) (reviewed 2026-07-20). --- ## Sources - [list of non-cooperative jurisdictions](https://www.consilium.europa.eu/en/press/press-releases/2023/02/14/taxation-british-virgin-islands-costa-rica-marshall-islands-and-russia-added-to-eu-list-of-non-cooperative-jurisdictions-for-tax-purposes) - [Announcement 2024-26](https://www.irs.gov/irb/2024-27_IRB) - [Decree No. 585](http://www.kremlin.ru/acts/bank/49700) - [Federal Law No. 598-FZ](http://kremlin.ru/acts/bank/50132) --- ## FAQ ### 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. This material is an expert overview and does not constitute individual tax advice. Russian regulation is changing rapidly; rates, the list of suspended articles, and credit mechanics should be verified against the current version of the Tax Code, Decree No. 585, and Federal Tax Service guidance. --- ## Factual claims - By the early 2020s, Russia was party to approximately eighty tax treaties—a dense network built since the mid-1990s. - The network began changing even before 2023. - On August 8, 2023, by Presidential Decree No. - The suspension covered articles that allocated taxing rights and provided reduced withholding tax rates—on dividends, interest, royalties, and capital gains. - 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. - The freeze affected distributive and rate articles, but not the entire treaty. - First, the suspension was formalized by decree, then enshrined in law: Federal Law No. - Reviewed: 2026-07-20 · Sources: Decree No.