Russia and Abkhazia have signed an agreement on the avoidance of double taxation. The document establishes uniform withholding tax rates on income in the form of dividends and royalties in the amount of 10%. The interest income tax rate is set at 0%, which will make it possible not to tax in the source State the interest paid on loans issued from another contracting State. This was announced by the Russian Government.
Taxes on such interest will be paid to the budget of the state that provided the borrowed funds.
The agreement also provides for the exemption of developers from paying income tax in the country where construction is carried out for a grace period of 18 months, during which the activities of a company in one state on the territory of another will not lead to the formation of a permanent representative office. During this grace period, the tax will be paid only in the country of residence.
The protocol should be ratified by the end of this year.
