U.S.A.: Suspension of Double Taxation Treaty with Russia
Clearstream Banking1 informs clients that effective
16 August 2024
the Double Taxation Treaty between U.S.A. and Russia (“DTT”) will be partially suspended by U.S.A.
Impact on clients
Under the DTT, residents of Russia were subject to a maximum withholding rate of 10% on U.S. sourced dividends and were exempt from U.S. withholding tax on payments of interest that did not qualify for the portfolio interest exemption. Those benefits will no longer be available after 16 August 2024 until otherwise decided by the two governments, nor will some other treaty provisions apply (including any exemption for Other Income payments). A 30% full statutory withholding rate on payments to Russian residents will come into effect on 16 August 2024 unless conditions for another exemption (for example, portfolio interest exemption) under U.S. domestic law are met.
The U.S. tax certification already provided to Clearstream Banking will remain valid for portfolio interest exemption (if applicable) as well as for reporting purposes. No further action is expected from our clients, unless they hold U.S. securities on behalf of Russian residents on a segregated account benefiting from reduced withholding tax rate under the DTT. These clients will have to either remove the holdings from the account or recertify the account. One-time certificates will remain valid unless clients inform us otherwise.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG clients using Creation Accounts), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.