USA partially suspends tax agreements with Russia

The US Treasury Department has officially notified Russian authorities that it is partially suspending a tax agreement as relations between the two countries continue to deteriorate two years after the start of the Ukraine war.

The IRS announced Announcement 2024-26 on Friday, announcing the partial suspension of the tax agreement between the United States and Russia. This happened shortly after a Notice Monday from the Ministry of Finance.

The formal notification to the Russian Federation of 17 June confirms the suspension of the application of Article 1, paragraph 4, and Articles 5 to 21 and 23 of the Agreement between the United States of America and the Russian Federation for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income and on Capital, signed in Washington on 17 June 1992, and the application of an annexed Protocol by mutual agreement.

Dimitar DIlkoff/AFP/Getty Images

Russian government officials had already attempted to suspend these agreements last year. The US Treasury Department’s action is a response to a notification from the Russian Federation dated August 8, 2023, that it wishes to suspend paragraph 4 of Article 1 and Articles 5-21 and 23 of the Convention and the Protocol.

The suspension will take effect for both withholding and other taxes on August 16, 2024, and will remain in place until the U.S. and Russian governments decide otherwise.