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