Development of court practice regarding application of the beneficial owner concept

On 2 August 2017 the Commercial Court of Kaliningrad Region delivered its decision (the “Decision”) on NPO Digital Television Systems (the “Company”) (case No. А21-2521/2017). The Decision is currently about the only positive example of the most recent court practice of the Russian courts dealing with application of the concept of the “person beneficially entitled to income” (the beneficial owner concept). Continue reading “Development of court practice regarding application of the beneficial owner concept”

Russia’s accession to the Multilateral Convention to implement measures under the BEPS Plan

On 7 June 2017 the Russian Federation signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “Multilateral Convention[1]). The Multilateral Convention was developed by the countries that are members of an Ad Hoc Group of the Organisation for Economic Cooperation and Development as part of implementing “Action 15” under the Plan to Prevent Base Erosion and Profit Shifting (BEPS). The Multilateral Convention makes it possible to implement the provisions of the BEPS Plan without amending existing agreements on avoidance of double taxation (“Tax Agreement”). Each jurisdiction may choose the provisions it considers acceptable for itself (other than mandatory provisions) and notify their treaty parties of this. Continue reading “Russia’s accession to the Multilateral Convention to implement measures under the BEPS Plan”

Development of court practice of determining direct capital investment for the purpose of applying the 5% withholding tax rate when paying dividends to a Cypriot company

On 3 May 2017 the Commercial Court of Chelyabinsk Region rendered a decision in case No. А76-20508/2016 under the claim of Chelyabenergosbyt PJSC (the “Company”). Continue reading “Development of court practice of determining direct capital investment for the purpose of applying the 5% withholding tax rate when paying dividends to a Cypriot company”

Development of court practice on thin capitalization cases

On 24 January 2017 the Commercial Court of Arkhangelsk Oblast delivered a judgement in case No. А05-9115/2016 (the “Judgement”) under the claim of Severnoye Siyaniye (Northern Lights) Oil Company Limited Liability Company (the “Company”). Continue reading “Development of court practice on thin capitalization cases”

Indirect sale of real estate in the Russian Federation in the context of the beneficial ownership rules

On 17 January 2017 the Commercial Court of Vladimir Oblast delivered a judgement in case No. А11-6602/2016 (the “Decision”) under the claim of Vladimir Energy Retail Company[1]  Public Joint-Stock Company (the “Company”). Continue reading “Indirect sale of real estate in the Russian Federation in the context of the beneficial ownership rules”

Application of the concept of the person beneficially entitled to (beneficial owner of) income

Dentons’ Russia Tax practice would like to remind that, starting from 1 January 2017, the procedure for confirming entitlement to tax benefits under relevant double tax treaties when paying income to foreign companies from the Russian Federation has changed. Continue reading “Application of the concept of the person beneficially entitled to (beneficial owner of) income”

Registration with the RF tax authorities aimed at payment of VAT by foreign e services providers

Dentons’ Russia Tax practice would like to remind readers that, starting 1 January 2017, foreign companies providing e-services are required to undergo special tax registration according to the procedure of Clause 4.6 of Article 83 of the RF Tax Code, to file tax reporting and to pay VAT on such transactions. Continue reading “Registration with the RF tax authorities aimed at payment of VAT by foreign e services providers”