July, 2017: Application of the reduced withholding income tax rates

The lower-level courts ruled against the interpretation of the supreme court.

On February 16, 2017, the Presidium of the Supreme Court of the Russian Federation issued its Overview of the court practice relating to application of Section V.1 and Article 269 of the Tax Code of the Russian Federation. In paragraph 14 of the Overview the Supreme Court gives an interpretation that favors the taxpayers by allowing reclassification of controlled debt into equity for the purposes of applying the reduced withholding income tax rates under international treaties for avoidance of double taxation. However, the lower-level Russian courts consistently rule against the Supreme Court on this matter.

Please, find more information in Russian tax alert below.