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Russia Clarifies Effect of Thin Cap Rules on Taxation of Interest Payments to Related Party under Tax Treaty with the Netherlands

|Treaty Development|Russia-Netherlands
Russia-Netherlands

Russia's Ministry of Finance recently published Guidance Letter No. 03-03-06/1/46720, which clarifies the taxation of interest payments from a Russian entity to a Dutch related party under the Netherlands-Russia tax treaty. According to the letter, when such payments are made to a related party (20% direct or indirect ownership) and the debtors thin capitalization threshold has been exceeded (3…

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