The agreement will promote the continued development of mutually beneficial cooperation between Russia and China and the attraction of mutual investments. Russian tax agencies’ ability to request information from their Chinese counterparts will enable them to use additional sources of tax deductions in their budgets.
The draft agreement between the governments of Russia and China on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the protocol to it (hereinafter referred to as the Agreement and the Protocol) have been drafted by the Ministry of Finance and coordinated with the Ministry of Foreign Affairs, the Ministry of Economic Development, the Ministry of Justice and the Federal Tax Service after discussions with their Chinese counterparts.
A previous agreement was signed between Russia and China on 27 May 1994. In view of the development of bilateral economic relations and taking into account international taxation trends, the appropriate authorities of the participating states have decided to amend that agreement.
The Agreement is aimed at avoiding double taxation and concerns taxes on the total income or separate parts of the income of individuals who are liable to tax by reason of their domicile, residence, place of management or place of registration in Russia or China, including taxes on income from the compulsory purchase of movable or immovable property and taxes on the total amount of their salaries. The draft of this Agreement also regulates the information exchange between the appropriate authorities of the participating states.
The Agreement includes provisions that are different from the provisions sealed in Russian legislation with regard to the taxation of dividends, interest, royalties and license revenue, and the international transport income of legal entities and private individuals of the participating states. Therefore, this Agreement should be ratified in accordance with the established procedure.
The Agreement will promote the continued development of mutually beneficial cooperation between Russia and China and the attraction of mutual investments. The Russian tax agencies’ ability to request the relevant information from their Chinese counterparts will help them use additional sources of tax deductions in their budgets.
The draft of this Agreement was discussed and approved at the Government meeting on 5 February 2014.