Whether your tax treaty with Russia still works decides what you pay to get profit home. In 2023 Russia suspended the key provisions of treaties with 38 'unfriendly' countries — and which side of that line you're on changes everything.
Russia suspended the operative articles of treaties with 38 unfriendly countries (Decree 585, 2023). For them, reduced rates are gone — dividends face 15%, interest and royalties 20%.
Confirm your country's status, price the withholding cost per year, and check whether an active-treaty route (UAE, Turkey, China) legitimately reduces it — with real substance, not a paper layer.
Russia's double tax treaty network was one of the most extensive in the world — over 80 active agreements covering virtually every major trading partner. Since August 2023, nearly half of those treaties have been suspended, fundamentally changing the tax economics for international groups with Russian operations.
Understanding exactly which treaties are active, which are suspended, and what the practical consequences are for withholding tax, dividends, interest and royalties is now essential planning information for any business with a Russia connection.
On 8 August 2023, President Putin signed Decree No. 585, partially suspending key income tax provisions in double tax treaties with 38 countries Russia designated as "unfriendly." The suspension covers all articles regulating taxation of income — dividends, interest, royalties, employment income, capital gains, directors' fees — while leaving in place procedural provisions such as tax information exchange.
The suspension was declared open-ended — it will remain in effect "until foreign states eliminate violations of Russia's economic interests." There is no scheduled review date and no diplomatic process underway to restore the treaties.
The treaties still technically exist — Russia suspended their operative provisions (Decree 585, 2023). The practical effect is the same: no reduced rates for the 38 unfriendly countries, so the domestic rates apply.
China, UAE, Türkiye, India, CIS and others: treaty rates hold with the right documentation.
EU, US, UK, Japan, Korea and 30-plus more: 15%/20% with no relief until restored.
Some jurisdictions (e.g. Saudi Arabia): domestic rates by default, unless routed through an active-treaty country.
New treaties can change the picture — the UAE treaty entered force in 2026. Status is worth checking, not assuming.
Dividends 15%, interest 20%, royalties 20% — with no foreign tax credit. Where an active treaty once gave 5% on dividends, it is now 15%.
The suspension means that domestic Russian withholding tax rates apply to payments from Russia to companies or individuals in suspended-treaty jurisdictions — without any treaty reduction. The change is significant:
Pick what applies — we'll tell you the realistic options:
Employment income provisions are also suspended. This means that a German company whose employees work in Russia can no longer rely on the treaty to determine which country has taxing rights over that employment income. The domestic rules of both countries apply — creating double taxation risk for the employees. For companies from suspended-treaty jurisdictions with staff in Russia, personal tax planning has become significantly more complex.
The UK went further than other suspended-treaty countries. Rather than simply accepting Russia's unilateral suspension, the UK Parliament passed the Double Taxation Relief (Russian Federation) (Revocation) Order 2025, which came into force on 6 April 2025. This formally revoked — not just suspended — the 1994 UK-Russia double tax agreement.
The practical effect is the same as suspension — domestic rates apply — but revocation is more definitive. Unlike a suspension which could theoretically be reversed, revocation requires negotiating and ratifying an entirely new treaty. UK companies with Russian operations should plan on the basis that no treaty protection will be available for the foreseeable future.
The Russia-UAE double tax treaty, signed 17 February 2025 and in force from 1 January 2026, is the first significant new active DTT between Russia and a major business jurisdiction since 2022. It applies to all residents of both countries including private companies and free zone entities — not just state entities as the previous limited 2011 agreement did.
The UAE treaty is significant for two reasons. First, it provides concrete treaty protection (10% on dividends, interest and royalties) to companies restructuring their Russian holdings through UAE intermediaries. Second, it demonstrates that Russia is willing to negotiate and ratify new treaties — signalling that the current suspended-treaty situation is not necessarily permanent, even if restoration with unfriendly jurisdictions appears distant.
For international groups based in suspended-treaty jurisdictions — Germany, France, UK, Netherlands, Switzerland and others — the immediate consequences are:
Dividends from Russia — 15% withholding tax instead of 5-10% under the former treaties. For groups that regularly repatriate Russian profits, this is a direct and recurring cost increase
Intercompany loan interest — 20% withholding tax. Groups with Russian entities funded by intercompany debt should reassess their financing structures — interest payments are now significantly more expensive to remit
Management fees and royalties — 20% withholding tax. Intercompany service fees and IP licence payments from Russia to parent companies in suspended-treaty jurisdictions are now subject to 20% WHT, making these structures much less efficient
Capital gains — any treaty protection for gains on disposal of Russian assets is no longer available
Many international groups have restructured Russian holdings through UAE intermediate holding companies since 2022 — and the new UAE-Russia treaty provides treaty protection for those structures. A UAE company receiving dividends from a Russian LLC pays 10% WHT (down from 15% without the treaty). However, treaty benefits require genuine substance in the UAE — the UAE entity must be the beneficial owner of the income, not simply a conduit. See our guide to UAE companies in Russia for the full analysis.
Turkey and India both have active treaties with Russia and are not on the unfriendly countries list. Some groups have considered Turkish or Indian intermediate holding structures for similar reasons. The same beneficial ownership and substance requirements apply.
Russian tax authorities actively challenge arrangements where income is routed through a treaty-jurisdiction intermediary that lacks substance. Simply inserting a UAE, Turkish or Indian holding company between the Russian entity and the ultimate owner does not guarantee treaty protection. The intermediary must have genuine economic substance — real directors, real employees, genuine decision-making — and must be the beneficial owner of the income. Structures that merely route payments without adding value will be challenged.
Identify all intercompany payments from Russia — dividends, interest, royalties, management fees — and determine the current WHT rate applicable
For suspended-treaty jurisdictions: recalculate the annual WHT cost and factor into profit repatriation planning
For intercompany loans: assess whether the 20% WHT on interest makes the debt structure viable — consider equity financing as an alternative
For royalties and IP licences: assess whether the 20% WHT makes the arrangement cost-effective versus alternatives
For UAE holding structures: ensure the UAE entity has genuine substance to claim the new treaty benefits
It depends on the 'unfriendly' list. Russia suspended the operative provisions of treaties with 38 countries — the EU, US, UK, Japan, Korea and others — from 2023. Treaties with China, the UAE, Turkey, India and the CIS remain active. The treaty text still technically exists for suspended countries, but the rate reductions don't apply.
The domestic rates, with no treaty relief: 15% on dividends, 20% on interest and 20% on royalties. That's the difference the suspension makes — where you might have paid 5% on dividends under an active treaty, it's now 15%, with no credit mechanism available.
Sometimes — those treaties are active and offer reduced rates. But Russian authorities apply a substance and beneficial-ownership test, so a holding company inserted purely on paper won't hold. Whether it genuinely helps depends on your real operations, and it's worth modelling before you build it.
This maps which treaties survived and which were suspended. The question for your group is narrower: what is the suspension actually costing you per year in withholding — and is there a structure that legitimately reduces it, or just looks like it does?
Repatriating profit soon? The difference between the old treaty rate and today's 15% is worth modelling before the payment leaves, not after.
Practical support for international business in Russia.