Russia's Ministry of Finance recently issued guidance clarifying the application of the Russian-Spain tax treaty on interest paid to a Spanish resident by a Russian resident for a long-term loan, and that loan is repaid early.
Under the Russian-Spain tax treaty, interest is generally subject to a maximum 5% withholding tax when paid to a beneficial owner. However, for a long-term loan with a period of seven years or more, the interest payments are exempt from withholding tax when the benefic…