TOKYO, August 9. /TASS/. The Japanese government has protested to Russia over Moscow’s decision to suspend certain provisions of double tax treaties with unfriendly countries, including the US, Japan and EU member states, Chief Cabinet Secretary Hirokazu Matsuno said at a press conference in Tokyo.
"We regret that Russia has decided to unilaterally suspend some provisions of the Japan-Russia tax treaty. Today, we protested to the Russian side through diplomatic channels and demanded that this decision be reversed," he said.
Russian President Vladimir Putin earlier signed a decree suspending certain provisions of double tax treaties with the United States, EU countries and other unfriendly states. According to the decree, the decision was made "based on the need to take urgent measures" in connection with the unfriendly actions of some countries. The documents listed in the decree are suspended "until foreign countries eliminate violations of the legitimate economic and other interests of the Russian Federation, the rights of its citizens and legal entities" or until the termination of the relevant documents.
Double taxation is the levying of taxes in different jurisdictions on the same income of an individual or entity, for example if an individual is a citizen of one country but earns income in another. Double taxation treaties (DTTs) are intended to prevent this and are concluded, among other reasons, to promote the development of economic cooperation between the signatory countries.
In mid-March, the Russian Finance Ministry and the Russian Foreign Ministry submitted a proposal to the president to suspend DTTs with all countries that have imposed sanctions against Russia. According to the Finance Ministry, in this case the application of reduced tax rates or tax exemptions to income covered by DTTs would be suspended starting from the date a relevant decree was issued.