As per the President’s instructions on attracting funding on Asian fiscal markets, this draft law provides for the ratification of the 15 November 2015 protocol amending the intergovernmental agreement between Russia and Singapore on avoiding double taxation and preventing income tax avoidance, which was signed on 9 September 2002. This will help Russian borrowers cut their spending when taking out and servicing Singaporean bank loans and will also stimulate government investment.
Reference
A federal law On the Ratification of the Protocol to Amend the Agreement between the Government of the Russian Federation and the Government of the Republic of Singapore on Avoiding Double Taxation and Preventing Income Tax Avoidance dated 9 September 2002 (hereinafter referred to as draft law and Protocol) has been drafted by the Ministry of Foreign Affairs and the Ministry of Finance in keeping with the President’s instructions to make the securing of funding on Asian fiscal markets more efficient.
The Protocol was signed in Moscow on 17 November 2015.
The Protocol introduces tax exemption for the interest paid in one contracting state on bank loans and credits taken out in another contracting state, as well as for dividends paid by the governments of the contracting states and their central banks. This measure will help Russian borrowers reduce spending on taking out and servicing Singaporean bank loans.
Under the Federal Law On the International Treaties of the Russian Federation, the Protocol is subject to ratification because it includes provisions that differ from those that are stipulated in Russian legislation.
The provisions of the draft law comply with the provisions of the Treaty on the Eurasian Economic Union of 29 May 2014 and other international treaties signed by the Russian Federation.
The draft law was discussed and approved at a Government meeting on 21 April 2016.