Windfall tax for major companies to be introduced in Russia
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News
30.03.2023
EXPLANATIONS FOR DETAILS OF APPLICABILITY OF AGREEMENTS ON AVOIDANCE OF DOUBLE TAXATION
Federal Tax Service has prepared answers to questions regarding:
- taxation of foreign companies that do not have permanent representative offices in Russia, but obtain income from sources in the Russian Federation;
- application of agreements on avoidance of double taxation concluded by Russia with foreign states.
In particular, it is established that return of the principal amount of the debt by a Russian borrower to a foreign lender is not considered as the lender's income from sources in the Russian Federation, since it does not produce economic benefits.
Agreements do not give tax agents (taxpayers) the choice of the state in which the tax must be paid. Also, they do not establish new tax rates, but only limit the tax rates provided for by the Tax Code of the Russian Federation. If the agreement provides for a higher withholding tax rate than provided for by the Tax Code of the Russian Federation, then the rate established by the Tax Code of the Russian Federation should be applied.
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