Following Russia’s recent request to revise the existing double taxation agreement (DTA) with Switzerland, the two Countries’ finance ministers have held a meeting to initiate discussion upon the matter.
Starting from 2020, Russia has renegotiated a number of DTTs (as with Malta, Luxembourg and Cyprus), increasing the withholding tax on outbound dividends and interest payments to 15 per cent with the aim to deter Russian residents from using offshore holding companies to manage domestic investments.
However, negotiations started with Switzerland might not necessarily follow the same path. In their first meeting, the ministers commended the cooperation in various sectors and discussed the challenges faced by businesses in the relevant markets. Furthermore, they signed a protocol on an amendment to the agreement on the mutual recognition of official hallmarks on precious metals in the watch industry, ensuring that these products do not require additional marking when imported into the Russian Federation and thus benefit from facilitated access to the Russian market.
Switzerland has estimated a volume of trade with Russia amounting to CHF 4.1 billion, with Russia holding capital stock of CHF 16.6 billion and being the ninth largest foreign investor in the Country. Swiss investment in Russia amounts to CHF 28.9 billion.