The tax treaty between Abkhazia and Russia enters into force on 28 November 2024. This agreement will become effective for withholding and other taxes starting from 1 January 2025.
It establishes a 10% withholding tax rate on dividends and royalties, with interest income tax set at 0%, meaning that interest on loans from one contracting state to another won’t be taxed in the source state, benefiting the lending state’s budget.
Additionally, developers are granted an 18-month tax exemption period during construction in another country, ensuring no permanent representative office is formed, with tax obligations resting solely on the country of residence.
Abkhazia is only recognised as an independent state by a handful of nations, including Russia, but the international community primarily recognises it as part of Georgia.
Earlier, Russia and Abkhazia took a step towards economic cooperation by signing an income tax treaty on 7 May 2024, marking the agreement as a first between the two regions. The Russian government approved draft laws for the ratification of income tax treaties with Abkhazia on 4 September 2024.
