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Russian application of the MLI  not earlier than 2021

The MLI was due to be applied to tax treaties concluded by the Russian Federation from 1 January 2020.

However, on October 1, 2019, the Russian Federation chose to make a reservation in accordance with Article 35(7(a)) of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) when signing the MLI. This reservation relates to the timing of application of the MLI.

In accordance with article 35 (7(a)) of the MLI, it will be applied for tax treaties concluded by Russia only after Russia and its tax treaty partners have exchanged notices stating that they finished all internal procedures necessary for the MLI to come into force with respect to every covered tax treaty. Other countries to make this reservation included Andorra, Cyprus, Estonia, Germany, Hong Kong, Indonesia, Italy, Kenya, Romania, Spain, Sweden and Switzerland.

To date, neither Russia nor any its tax treaty partners have sent such notices to each other or to the Organization for Economic Cooperation and Development (OECD). Therefore, the MLI will be applied with respect to tax treaties concluded by Russia not earlier than 1 January 2021, provided that the aforementioned conditions have been fulfilled by Russia and its tax treaty partners. The internal procedures relating to the application of the MLI with respect to tax treaties concluded by Russia are anticipated to be completed in Russia in 2020.
 

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