Finland Suspends Tax Treaty with Russia
For Russian tax residents, taxes withheld in Finland will no longer be creditable against Russian tax liabilities. As a result, certain types of income may become subject to effective double taxation.
The change will affect a broad range of income streams, including dividends, interest, capital gains, employment income, and other payments sourced from Finland. Individuals and businesses with Finnish assets or income sources may therefore face a significantly higher overall tax burden.
What does this mean in practice?
The period before the suspension takes effect provides an opportunity to review existing structures and assess potential exposure. Taxpayers with Finnish assets, bank accounts, or income streams should evaluate the impact of losing treaty protection, quantify potential additional tax costs, and consider whether changes to ownership structures or income arrangements may be appropriate. Early planning may help mitigate tax inefficiencies and compliance risks once the treaty ceases to apply.
