GENOA (UrduPoint News / Sputnik – 26th March, 2020) Italy is likely to be open for talks with Russia on the potential adjustment of the existing agreement to avoid double taxation in light of the new measures aimed to support the Russian economy announced by the president, Giorgio Rocca, a lawyer specializing in banking law, told Sputnik.
Earlier in the day, Russian President Vladimir Putin proposed a 15-percent tax on dividends and interest that leave Russia, up from the current 2 percent, as one of the steps to support the economy amid the coronavirus outbreak and slump in oil prices. The president noted that this would require adjustment of Russia‘s agreements on avoiding double taxation with some countries and that Russia might withdraw unilaterally from such deals if foreign partners rejected the new policy.
“I think that Italy will be open for talks if needed, considering the relevance of the business relations with Russia and the historically positive political relations between the two countries,” Rocca said, after referring to Putin‘s announcement as “a clear political statement that will be carefully taken into account by foreign governments.”
The talks would be needed to introduce any changes to the treaty currently governing the tax relations between Italy and Russia the convention on avoiding double taxation of 1996 (amended in 2011), which says that the state parties should try to resolve by mutual agreement any difficulties arising as to the interpretation or application of the convention.
If the two countries fail to reach agreement, Article 30 of the convention will be applied, according to which the side that wants to terminate the deal unilaterally must notify the other party about its decision at least six months before the end of the Calendar year.
“In this case, the convention will no longer be applied to revenues generated after January 1 of the next year. This means that in order to withdraw from the convention unilaterally by January 2021, Russia should send the notice of termination by the end of June this year,” Rocca said.
Several countries have laid out measures to prop the national economies amid the coronavirus outbreak, which has disrupted the international travel and numerous other business sectors. Italy counts 57,521 active cases of COVID-19. Russia has registered 658 cases so far.