The changes in Russia's tax treatment of interest as introduced in Federal Law no. 420-FZ will take effect 1 January 2015. The changes apply for transactions recognized as controlled for transfer pricing purposes and where one party to the transaction is a bank.
In such case:
- The lender may recognize the actual interest receivable as its taxable income if it exceeds the interest calculated at the lowest rate threshold (see below), and
- The borrower may deduct the actual interest payable if…