Cross-Border Individuals
The US–Russia Tax Treaty and Your Withholding: What the 2024 Suspension Means
Major provisions of the US–Russia tax treaty have been suspended since August 16, 2024. As a result, the treaty's reduced withholding rates no longer apply to affected US-source payments, which are now generally subject to the 30% statutory rate. The treaty has not been fully terminated, but the income provisions taxpayers relied on are currently unavailable.
This is an area where outdated information is actively harmful: many sources still describe treaty benefits that no longer apply. Here is the current position.
What changed
By mutual agreement, the United States and Russia suspended the operation of key provisions of their 1992 income tax treaty — including the articles governing dividends, interest, royalties, capital gains, and other income types — effective for payments on and after August 16, 2024. For affected US-source payments to Russian residents who previously claimed treaty relief, withholding reverts to the statutory 30% rate.
What this means in practice
| Before Aug 16, 2024 | Now | |
|---|---|---|
| Reduced rates on dividends, interest, royalties | Available under treaty | Generally unavailable |
| Default withholding on affected US-source income | Reduced treaty rate | 30% statutory rate |
| Permanent-establishment protection | Applied | Determined by domestic law |
| Risk of double taxation | Mitigated by treaty | Increased |
The treaty is suspended, not terminated
Importantly, the treaty remains technically in force; specific provisions are suspended until the two governments decide otherwise. That means the situation can change, and the date of each payment matters when determining which rules applied. Because this is a moving area, the current status should be confirmed before relying on any treaty position.
What affected taxpayers can still consider
With treaty relief unavailable, foreign tax credits and careful sourcing of income become more important to manage double taxation, and withholding agents must apply the statutory rate to affected payments. Anyone who structured arrangements around the old treaty rates should revisit them, ideally with someone who follows the suspension's status.
Frequently asked questions
Can I still claim US–Russia tax treaty benefits?
For affected income provisions, generally no. Those provisions have been suspended since August 16, 2024, so reduced treaty withholding rates no longer apply and the 30% statutory rate generally governs affected US-source payments.
Is the US–Russia treaty completely cancelled?
No. The treaty remains technically in force, but key provisions are suspended by mutual agreement until the two governments decide otherwise. The status can change, so verify current guidance.
What rate applies to my US-source income now?
For payments affected by the suspension, withholding generally reverts to the 30% statutory rate. Foreign tax credits may help reduce double taxation; the analysis depends on your specific income.
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Request a free consultationThis page is general educational information, not legal or tax advice for your specific situation, and does not create a client relationship. Tax rules, amounts, forms, and procedures change — verify against current IRS guidance or consult a qualified tax professional before acting.