Russia’s finance and foreign ministries on Wednesday called for the suspension of all double tax treaties with “unfriendly countries” and suggested that President Vladimir Putin issue a decree to that effect. According to Russian media reports, the realization of this proposal is likely. Since Austria, like all EU countries, has been considered “unfriendly” since March 2022, the Austrian-Russian agreement could also be affected.
The two ministries in Moscow justified their initiative with the classification of Russia as a tax haven by the EU finance ministers in February. Should the proposal gain support, the application of reduced tax rates and exemptions from tax payments on income covered by the double tax treaties would end with the publication of a related presidential decree, the ministries’ statement said.
On Thursday, Russian media such as “The Bell” assumed that the proposal would probably be implemented and at the same time speculated about possible consequences for people and companies with income in the 40 or so “unfriendly countries” with which Russia has concluded double taxation agreements. The agreement between Austria and the Russian Federation that came into force on December 30, 2002 could also be affected. There is no mention of suspension in this bilateral agreement, but Article 29 provides for the possibility of termination in writing before June 30 of each year, which would then take effect on January 1 of the following year.