Russia fine-tunes tax law to make it easier for foreign companies to pay in rubles

Russian legislators passed a tax law amendment on Wednesday that foreign companies would open accounts in Russian banks and facilitate payments for Russian gas and other commodities in the ruble.

Russian President Vladimir Putin signed a decree last month requiring foreign buyers to pay for ruble gas or cut supplies. He said this was necessary as Western sanctions on Ukraine would prevent Moscow from accessing the money if they paid in hard currency.

In fact, the bill requires foreign gas buyers to open rubles and hard currencies accounts at Gazprombank. Gazprombank receives payments in foreign currencies and converts them into rubles through an auction on the Moscow Stock Exchange.

Olga Anuflieva, vice chairman of Parliament’s Budget Committee, said the new amendments would “significantly simplify account registration and opening” with Russian banks.

Putin said the role of domestic currencies such as the ruble in export transactions should increase, and Reuters reported Wednesday that oil giant Rosneft demanded a full prepayment with the ruble in a crude oil bid.

Kremlin spokesman Dmitry Peskov said there is still time for so-called “unfriendly” nations to switch to the ruble, as Putin’s orders are due to expire in May.

On February 24, Russia invaded Ukraine in a way called “special operations” to demilitarize and “demilitarize” its neighbors. Ukraine and the Western nations dismissed this as an excuse for unfounded war.