Tuesday, June 12, 2007

Russian FTS Considers the Need to Sign Double Tax Agreement with BVI

Russia's Federal Tax Service (FTS) has said that double taxation treaties should be concluded between the country and offshore jurisdictions, such as the British Virgin Islands, Gibraltar, the Normandy Islands and the Seychelles.

The opinion that Russia has to sign agreements on exchanging tax information with tax havens was expressed by deputy head of the FTS some days ago. Konstantin Sedov stated that Russia has agreements on avoiding double taxation with most countries in the world, but tax agencies are now exchanging information through those agreements only on direct taxes.

In his interview with the FTS' Russian Tax Courier magazine Sedov said that these agreements with offshore tax havens need to extend to indirect taxes to improve the exchange of information between the countries on this matter. He also informed that the Federal Tax Service has sent a proposal to the Finance Ministry to consider holding corresponding talks with the relevant agencies of foreign governments.

The fact that is worth mentioning here: British Virgin Islands are among the biggest direct investors in Russia in 2006, along with Cyprus, Britain, the Netherlands, Luxemburg, France, Germany, Switzerland and the United States.
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