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Belgium-Russia

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New Tax Treaty between Belgium and Russia Signed

On 19 May 2015, officials from Belgium and Russia signed a new income and capital tax treaty. Once in force and effective will replace the 1995 tax treaty between the two countries, which is currently in force.

Taxes Covered

The treaty covers Belgian individual income tax, corporate income tax, income tax on legal entities, and income tax on nonresidents. It covers Russian individual income tax, corporate income tax, property tax and the tax on personal property.

Withholding Tax Rates

  • Dividends - 5% if the beneficial owner is a company that has directly held at least 10% of the paying company's capital for a continuous period of at least 12 months and the participation in the capital is at least EUR 80,000 or equivalent in RUB; otherwise 15%
  • Interest - 10%, although an exemption is provided for interest paid on a loan made by an enterprise of one Contracting State to an enterprise of the other State
  • Royalties - 0%

Capital Gains

The following capital gains derived by a resident of one Contracting State may be taxed by the other State:

  • Gains from the alienation of immovable property situated in the other State; and
  • Gains from the alienation of movable property forming part of the business property of a permanent establishment in the other State

Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.

Double Taxation Relief

Russian applies the credit method for the elimination of double taxation, while Belgium generally applies the exemption method. However, subject to the provisions of Belgian law, Belgium will apply the credit method for interest and royalty income.

Limitation on Benefits

Article 27 (Limitation on Benefits) includes the provision that the benefits of the treaty will not apply for a resident of a Contracting State if the main purpose or one of the main purposes of such resident or a connected person was to obtain the benefits of the treaty.

Entry into Force and Effect

The treaty will enter into force once the ratification instruments are exchanged, and will apply from 1 January of the year following its entry into force.

The provisions of the 1995 income and capital tax treaty between Belgium and Russia will cease to have effect once the new treaty is effective.

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