Russia reach agreement with Oman to avoid double taxation

(MENAFN) Russia and Oman have recently signed an agreement aimed at avoiding double taxation, signaling a significant development in their economic relationship, according to Russia's finance ministry. Deputy Finance Minister Alexei Sazanov emphasized the importance of expanding trade and strengthening economic cooperation between the two countries, noting that mutual trade had already grown by 46 percent in 2022. With the signing of this agreement, both nations aim to further enhance their trade turnover.

It is worth noting that Russia has proposed suspending its double taxation agreements with countries it considers "unfriendly." These are nations that have imposed sanctions on Russia due to its invasion of Ukraine. Currently, Russia has double taxation treaties with 84 countries, including major economic players such as the United States, the United Kingdom, Germany, France, and Japan, all of which have imposed sanctions on Russia. These agreements are designed to prevent the same income from being taxed in both states.

The newly signed agreement with Oman outlines specific tax rates for different types of income. Dividend income will be subject to a general withholding tax of 15 percent, while companies holding at least a 20 percent stake in the dividend payer will enjoy a reduced rate of 10 percent. For interest income and royalties, a tax rate of 10 percent will be applied. The finance ministry also mentioned that state-owned entities and other forms of public investment would be exempt from the withholding tax on dividend and interest income.

To come into effect from January 1, 2024, the agreement will need to be ratified within the current year. This step is expected to contribute to the strengthening of economic ties between Russia and Oman while fostering increased trade and cooperation in various sectors.

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