Tax code

Russia changes tax code to make it easier for foreign companies to pay in rubles

An employee holds 1,000 Russian ruble banknotes at the Goznak printing house in Moscow, Russia July 11, 2019. REUTERS/Maxim Shemetov/File Photo

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April 20 (Reuters) – Russian lawmakers on Wednesday passed an amendment to the tax code which they say would make it easier for foreign companies to open accounts with Russian banks and pay for Russian gas and other goods in rubles.

Russian President Vladimir Putin signed a decree last month requiring foreign buyers to pay for gas in rubles or risk having their supply cut off. He said this was necessary because if they paid in hard currency, Western sanctions against Ukraine would prevent Moscow from accessing the money. Read more

In practice, the measure requires foreign gas buyers to open ruble and hard currency accounts at Gazprombank, which will receive their foreign currency payments and convert them into rubles via auction on a Moscow exchange.

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Olga Anufrieva, deputy chair of the parliamentary budget committee, said the new amendment “greatly simplifies registering and opening an account” with a Russian bank.

Putin said the role of national currencies such as the ruble in export deals should increase, and Reuters reported on Wednesday that oil giant Rosneft had asked for rubles and full advance payments in crude tenders. . Read more

Kremlin spokesman Dmitry Peskov said there was still time for so-called “unfriendly” countries to switch to the rouble, as payments for gas delivered since Putin’s decree will fall due in May.

Russia invaded Ukraine on February 24 in what it called a “special operation” to demilitarize and “denazify” its neighbor. Ukraine and Western nations dismissed this as a baseless pretext for war.

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Reuters reporting; Editing by Nick Macfie

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