The Russian Supreme Court issued Decision 302-ES20-7898 on 6 October 2020 regarding the treatment of income as within the scope of the "Other Income" article of a tax treaty.

The case involved a Russian company, Coiltubing-Service LLC, which had entered into a financial leasing agreement with a company in Belarus, ASB Leasing LLC. In making payments to ASB Leasing, Coiltubing considered that the payments fell within the scope of Article 7 (Business Profits) of the 1995 Belarus-Russia tax treaty and, because the payments were not attributed to a permanent establishment of ABS Leasing, Coiltubing withheld no tax on the payments. However, the Russian tax authority considered that the lease payments fell within the scope of Article 18 (Other Income) as other passive income, which would be taxable in Russia as per the provisions of the article, and charged Coiltubing for withholding tax at a rate of 20% plus penalties for late payment.

The position of the tax authority was appealed, with all lower courts finding that the tax authority's position was correct. In particular, the lower courts found that because financial lease payments are not specifically addressed in the treaty, Article 18 (Other Income) should apply, and the lease payments may be taxed according to domestic law. If resulting in double taxation, this should be addressed by a tax credit (deduction) for ASB Leasing in Belarus.

In its decision, the Supreme Court disagreed with the lower courts, finding that income types not specifically addressed in a tax treaty should not automatically fall within the scope of the other income article. With respect to the Belarus-Russia tax treaty, the court ruled that the treatment of income not specifically addressed must first be considered in terms of the provisions Article 7 (Business Profits). If Article 7 does not apply (there is no permanent establishment), the treatment of income must then be considered in terms of Articles 8 through 17 on specific income types, which the lower courts did not do. In particular, it noted that the interest component of financial lease payments should be considered in terms of Article 10 (interest), which would be subject to a 10% withholding rate and not the 20% rate imposed by the tax authority. Only after a thorough review of the income in terms of these Articles 7 and 8 to 17 may the income then be considered subject to Article 18 (Other Income). Based on this, the Supreme Court invalidated the lower court decisions and sent the case back to the court of first instance for reconsideration based on the approach described above.