THE HAGUE, December 8. /TASS/. The Netherlands disagrees with the Russian proposal to amend the tax treaty, press officer of the Dutch Finance Ministry Remco Raus.
"According to the Netherlands, the Russian proposal to amend the tax treaty takes too limited account of real economic activities. This proposal therefore has negative consequences for both the Dutch and Russian businesses," he said.
According to Raus, the Dutch side has made "constructive proposals to preserve the tax treaty for real economic activities whilst preventing access to activities that do not contribute to the economy in line with the Dutch policy to combat tax avoidance." He added that discussions on the revision of the tax treaty are still ongoing.
Generally, the Netherlands is prepared to review the tax treaty and is constructive during the process, Raus said. He added that for his country it is important that a new treaty does justice to mutual interests.
"Various Dutch companies (both listed and non-listed) are developing activities in Russia and vice versa. Both Russia and the Netherlands benefit from retaining these economic activities," he said.
Last week, Russia’s Finance Ministry announced that it had begun to develop a bill to denounce the tax agreement with the Netherlands. The department noted that before that, the parties had passed several rounds of negotiations to amend the agreement on the avoidance of double taxation in terms of increasing the withholding tax to 15% in respect of dividends and interest. The conditions Russia offered the Dutch side conditions are similar to those that had already been agreed with Cyprus, Luxembourg and Malta, but the negotiations were unsuccessful. In turn, the Russian side did not support the approach to changing the agreement proposed by the Netherlands, since it provided for the preservation of separate channels for the withdrawal of funds from the country.
According to the Finance Ministry, under the current agreement, significant resources were withdrawn to the Netherlands in the form of interest and dividend payments. The volume of such payments amounted to more than 457 billion rubles ($6.2 bln) in 2017, more than 412 billion rubles ($5.6 bln) in 2018 and more than 339 billion rubles ($4.6 bln) in 2019.