The treaty, previously signed by Presidents Boris Yeltsin and George Bush at a U. S. - Russian summit in June, introduces favorable tax terms for American business, including the reduction of a tax on repatriated dividends to 5 from 15 percent, and the elimination of a 20-percent tax on royalties. It also contains a special protocol which allows companies to receive tax credits in the United States for taxes paid in Russia on profits.
The treaty also allows companies to deduct wages from their profits before calculating their tax liabilities.
The treaty, however, which does not affect personal income tax, will go into effect only after being ratified by the U. S. Congress, which is not expected to take it up until sometime next year.
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