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Ottawa, October 5, 1995
1995-078

Tax Convention Signed by Canada and the Russian Federation

Finance Minister Paul Martin today signed, at Ottawa, an Agreement between Canada and the Russian Federation for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital. The Agreement was signed on behalf of the Russian Federation by Deputy Prime Minister Alexander Zaveryukha.

The Agreement is patterned to a large extent on the model of double taxation convention prepared by the Organisation for Economic Co-operation and Development. Under the Agreement, a general rate of withholding tax of 10 per cent will apply to dividends paid to a parent company, on branch profits, on interest and on royalties. The rate of withholding tax on other dividends is set at 15 per cent. The Convention also provides for a number of exemptions in the case of interest and royalties.

The Agreement will enter into force after Canada and the Russian Federation have notified each other of the completion of the procedures required by law for its bringing into force and its provisions will have effect as of the first of January of the calendar year following the year of the entry into force.

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For further information:

Jean-Marc Déry
Tax Legislation Division
(613) 992-1862

For copies of the text of the Agreement
Distribution Centre
(613) 995-2855