Gazprom liquidates two of its Dutch companies

Gazprom Capital LLC said it is voluntarily liquidating two of Gazprom group's Dutch companies, Gazprom Sakhalin Holdings B.V. and Gazprom Finance B.V.

As reported, the agreement between Russia and the Netherlands on the avoidance of double taxation expired in 2022, since the Netherlands did not agree to increase the tax rate on dividends and interest to 15%. The agreement in force at that time provided for attractive tax conditions, making it possible to withdraw profits from Russia, paying tax at an effective rate of 2%-3%, the Russian Finance Ministry said.

In anticipation of the expiration of the agreement, Gazprom transferred the assets previously held by its Dutch SPVs to Russian jurisdiction. Gazprom Sakhalin Holdings was the owner of Gazprom's share in Sakhalin Energy Investment Company Ltd., operator of the Sakhalin-2 project. However, this share was transferred to the Russian Gazprom Sakhalin Holding LLC at the end of 2021. In addition, the project now has a Russian operator, Sakhalin Energy LLC.