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Russia Issues Clarification on Taxation of Contractual Penalties Paid from Russia to Cyprus

|Treaty Development|Russia
Russia

The Russian Ministry of Finance published guidance on the application of the Russia-Cyprus tax treaty for the tax treatment of contractual penalties when paid by a Russian company to and Cypriot company.

Under Russian tax law, penalties for violation of contractual terms paid by a Russian company to a foreign company are considered Russian-sourced income and subject to taxation at source. How…

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