Canada enters a Russian tax black list

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A thorny path to double taxation between the two countries

Federal Tax Service of Russia intends to include Canada in their list of countries whose authorities do not provide information to Russia for taxation purposes.

The Russian Federal Tax Service prepared a draft of their annual update of a list of countries which do not participate in the exchange of information on taxes with Russia. As stated in the explanatory note posted on the Federal Portal for Draft Normative Legal Acts, the list is made up of states and territories with which the Russian Federation has no applicable double taxation treaties. Canada has appeared on the list, despite the 1995 Agreement between the Government of the Russian Federation and the Government of Canada for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital. And, according to Russia’s Tax Service official website, this document came into force on May 5, 1997.

“This list is meant for the purpose of making foreign companies, controlled by Russian taxpayers and registered in the corresponding jurisdictions, responsible for their income tax payments in the Russian Federation.”

The draft has been opened for public consultation on the Federal Portal since August 8, 2018. After August 22, it will be amended if needed. The final order will take effect on January 1, 2019, and will be revised later that year.

Together with Canada, the draft list is widened by the Republic of Congo, while Belize, Brazil, Liechtenstein, Panama, Saint Kitts and Nevis, Seychelles, and Uganda are excluded from there. In total, the list consists of 102 countries plus 18 territories.

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