Double Taxation Relief (Taxes on Income) (Russian Federation)

L.N. 428 of 2020

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (Russian Federation)

(Amendment) Order, 2020

IN EXERCISE of the powers conferred by article 76 of the

Income Tax Act, the Minister for Finance and Financial Services, has

made the following order:-

The title of this order is Double Taxation Relief (Taxes on

Income) (Russian Federation) (Amendment) Order, 2020 and it shall

be read and construed as one with the Double Taxation Relief (Taxes

on Income) (Russian Federation) Order, hereinafter referred to as "the

principal order".

(Article 2)

PROTOCOL

AMENDING THE CONVENTION BETWEEN THE

GOVERNMENT OF MALTA AND THE GOVERNMENT OF THE

RUSSIAN FEDERATION FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME OF 24 APRIL 2013

The Government of Malta and the Government of the Russian

Federation,

desiring to conclude a Protocol to amend the Convention

between the Government of Malta and the Government of the

Russian Federation for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income,

signed at Moscow on 24 April 2013 (hereinafter referred to as

"the Convention"),

have agreed as follows

ARTICLE I

1. Paragraphs 2 and 3 of Article 10 "Dividends" of the

Convention shall be modified as follows

"2. However, such dividends may also be taxed in the

Contracting State of which the company paying the dividends is

a resident and according to the laws of that Contracting State, but

if the beneficial owner of those dividends is a resident of the

other Contracting State, the tax so charged shall not exceed

fifteen per cent (15%) of the gross amount of the dividends.

It is hereby declared

(a) that the amendments to the principal order, as

specified in the Protocol set out in the Schedule to this order

(hereinafter referred to as "the Protocol"), have been made with

the Government of the Russian Federation;

(b) that it is expedient that those amendments should

have effect following the entry into force of the Protocol and in

accordance with the relevant provisions of the Protocol;

(c) that the Protocol shall enter into force on such date as

may be announced by notice in the Gazette.

Notwithstanding the provisions of paragraphs 1 and

2, dividends paid by a company which is a resident of a

Contracting State may also be taxed in that Contracting State

according to the laws of that Contracting State, but

i.

if the beneficial owner of the dividends is a

resident of the other Contracting State and the beneficial

owner is an insurance undertaking or a pension fund; or

ii.

if the beneficial owner of the dividends is a

resident of the other Contracting State and the beneficial

owner is a company whose shares are listed on a registered

stock exchange provided that no less than fifteen per cent

(15%) of voting shares of that company are in free float and

which holds directly at least fifteen per cent (15%) of the

capital of the company paying the dividends throughout a

three-hundred and sixty-five (365) day period that includes

the day of payment of the dividends; or

iii. if the beneficial owner of the dividends is a

resident of the other Contracting State and the beneficial

owner is the Government of that Contracting State or a

political subdivision or a local authority thereof; or

iv. if the beneficial owner of the dividends is a

resident of the other Contracting State and the beneficial

owner is the Central Bank of that Contracting State,

the tax so charged shall not exceed five per cent (5%).".

2. The reference in paragraph 5 of Article 10 "Dividends" of

the Convention to "paragraphs 1 and 2" shall be substituted by a

reference to "paragraphs 1, 2 and 3.".

ARTICLE II

1. Paragraph 2 of Article 11 "Interest" of the Convention shall

be substituted by the following paragraph

"2. However, such interest may also be taxed in the

Contracting State in which it arises and according to the laws of

that Contracting State, but if the beneficial owner of the interest

is a resident of the other Contracting State, the tax so charged

shall not exceed fifteen per cent (15%) of the gross amount of the

interest.".

2. New paragraph 3 shall be added to Article 11 "Interest" of

the Convention which shall read as follows

"3. Notwithstanding the provisions of paragraphs 1 and

2, interest arising in a Contracting State and paid to a resident of

the other Contracting State, who is the beneficial owner of the

interest, may also be taxed in the Contracting State in which it

arises and according to the laws of that Contracting State, but if

A)

the beneficial owner is

i.

an insurance undertaking or a pension

fund; or

ii.

the Government of that Contracting State

or a political subdivision or a local authority thereof;

or

iii.

the Central Bank of that Contracting

State; or

iv.

a bank; or

v.

a company whose shares are listed on a

registered stock exchange provided that no less than

fifteen per cent (15%) of voting shares of that

company are in free float and which holds directly at

least fifteen per cent (15%) of the capital of the

company paying the interest throughout a three-

hundred and sixty-five (365) day period that includes

the day of payment of the interest; or

B) the interest is paid in respect of the following

securities listed on a registered stock exchange

i.

government bonds;

ii.

corporate bonds;

iii.

Euro-bonds,

the tax so charged shall not exceed five per cent

(5%).".

3. The existing paragraphs 3, 4, 5, 6, 7 and 8 of Article 11

"Interests" of the Convention shall be renumbered as paragraphs 4, 5,

The reference in paragraph 8, as renumbered, of Article 11

"Interest" of the Convention to "paragraph 2" shall be substituted by a

reference to "paragraphs 2 and 3".

ARTICLE III

In paragraph 3 of Article 23 "Non-discrimination" of the

Convention the words "paragraph 4 of Article 11" shall be substituted

by the words "paragraph 5 of Article 11".

ARTICLE IV

Paragraph 2 of Article 25 "Exchange of Information" of the

Convention shall be amended as follows

"2. Any information received under paragraph 1 by a

Contracting State shall be treated as secret in the same manner as

information obtained under the domestic laws of that

Contracting State and shall be disclosed only to persons or

authorities (including courts and administrative bodies)

concerned with the assessment or collection of, the enforcement

or prosecution in respect of, the determination of appeals in

relation to the taxes referred to in paragraph 1, or the oversight of

the above. Such persons or authorities shall use the information

only for such purposes. They may disclose the information in

public court proceedings or in judicial decisions.

Notwithstanding the foregoing, information received by a

Contracting State may be used for other purposes when such

information may be used for such other purposes under the laws

of both Contracting States and the competent authority of the

supplying Contracting State authorises such use.".

ARTICLE V

Amendments to the Convention provided for in this Protocol

shall form an integral part of the Convention. This Protocol shall apply

provisionally from 1st of January 2021 and shall enter into force on the

date of the latter of the notifications of the Contracting States in

writing, through diplomatic channels, of the completion of the

procedures required by the domestic law for the entry into force of this

Protocol.

DONE at Moscow on 1 st October 2020 duplicate, in the Russian

and English languages, both texts being equally authentic.

For the Government of the

For the Government of the

Republic of Malta

Russian Federation

Pierre Clive Agius

Alexey Valerievich Sazanov

Ambassador to the Russian

State Secretary and Deputy

Federation

Minister of Finance of Russia

€0.45