Putin outlines plan to stabilize Russian economy, including 15% tax on offshore funds

Russian President Vladimir Putin outlined a range of measures on Wednesday to tackle the economic impact of the Covid-19 outbreak.

Putin has asked the cabinet to give small and medium-sized businesses a six-month tax holiday, apart from the sales tax, and asked the central bank to take other measures to prevent layoffs and bankruptcies (including a six-month holiday on mortgage and credit payments).

He has also urged employers to help maintain stability on the labor market. The government has been tasked to increase unemployment benefits to the minimum wage, which is 12,130 rubles (about $155) per month.

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According to the Russian president, all income payments (as interest and dividends) leaving the country should be taxed adequately.

“Currently two-thirds of such funds, and, in fact, this is the income of specific individuals (as a result of various kinds of schemes of the so-called optimization), are subject to a real tax rate of only 2 percent. While citizens, even with small salaries, pay income tax of 13 percent. This is, to say the least, unfair. Therefore, I propose for those who withdraw their income in the form of dividends to foreign accounts, to provide a tax rate on such dividends of 15 percent.”

Putin added that Russia is prepared to “withdraw from agreements on avoiding double taxation with countries which disagree with these measures.”

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