Russian citizens working abroad are interested in the issue of double taxation, due to which foreign employment on a legal basis loses its meaning. This aspect of economic relations with Germany was resolved back in the last century.
The realities of our time are such that a huge percentage of the population works not in their own state, but abroad. , consider not only the prospects for receiving decent remuneration for their work, but also factors such as tax system and the attitude of the state in general towards labor immigrants and foreign firms.
or getting a job, our citizens expect to receive good income. A double tax could dash these hopes. Despite the fact that the country is one of the most promising states for both businessmen and labor immigrants.In simple terms, double taxation is a situation where the same type of activity in two different countries is subject to the same taxes. This is possible when a citizen of one country gets a job in another. At home, he pays taxes, since according to the law of his country he is obliged to pay, no matter where he is, and when visiting he pays the same thing again.
There is only one conclusion: a person has no choice but to violate the laws of both states and not show his income at all. Otherwise, he will work not for himself and his family, but for two systems.
The problem arose due to the fact that different countries around the world use different approaches to resolving the issue. Some tax everything their citizens earn, others collect their legal interest on a territorial basis, that is, where human activity that generates income takes place.
Many states use both principles, forcing their citizens to either eke out a miserable existence, living on pennies and giving away 60-80% instead of 30-40%, or to live well, but at the same time take risks by breaking the law.
The issue can be resolved in two ways:
- Countries share tax jurisdiction and agree on who will collect their interest on what.
- A person gets credit for taxes paid in another state.
A modern solution to the issue is an agreement to avoid double taxation, accepted by many countries.
Treaties concluded by countries on double taxation
Countries are interested in economic interaction, so their leaders have to look for a way out of the current situation. Treaties on the suppression of double taxation became such a solution.
It is important to understand that these types of contracts do not apply to all people and not all companies.
The concluded agreement relates to certain types of taxes and determines where and to what extent they will be paid. It applies not only to income, but also to property.
Russia has concluded similar agreements with many countries:
- Netherlands,
- Germany,
- Great Britain.
The treaties clearly define which individuals will not be subject to double taxation and which taxes will not be levied twice.
Of particular interest to Russians is the double tax treaty with Germany. This is due to the fact that the country offers both its citizens and labor emigrants profitable employment and transparent, very convenient and clear system taxation.
What Russia agreed with Germany
The agreement between the two states was signed back in 1996.
The agreement determines which taxes fall within its scope. All of them, both from the Russian and German sides, are related to income and alienated or profit-generating real estate. Residents-people and resident-enterprises are considered. On the German side, solidarity taxes, a tax surcharge and a trade tax are also included.
A large place in the agreement is occupied by explanations of what and how it will be called. Concepts are considered in this aspect.
Within the framework of this material, it is proposed to consider some of the most important formal and legal aspects of the use of double taxation agreements in Russia and the related arbitration practice.
International agreements (treaties, conventions) on the avoidance of double taxation are applied when taxing income from international transactions when the income is paid by a resident of one state, and the recipient of such income is a resident of another state. If there is an agreement in force between the two countries, the taxable party may be entitled to either an exemption from tax on such income or a reduced tax rate (depending on the type of income).
The purpose of any bilateral agreement for the avoidance of double taxation is to ensure conditions under which legal entities and individuals of each country will not pay taxes twice on the same type of income in their own state and the partner state. Thus, tax agreements help attract mutual investments, development of trade and other mutually beneficial economic cooperation between companies and entrepreneurs different countries. At the same time, such agreements are aimed at preventing tax evasion.
The Double Tax Treaty determines how taxation is allocated various types income between two member states, and also establishes the procedure for collecting withholding tax (that is, the tax withheld by the party paying income to the other party) on payments of dividends, interest, royalties, lease payments, etc. In some cases, the rate of such tax is significantly reduced, in others, the income is completely exempt from withholding tax.
Despite the fact that the conclusion of tax agreements is the prerogative of individual states, each of which independently determines with whom and on what conditions to enter into such agreements, the process of unifying the content of concluded agreements is currently underway, primarily on the basis of the Model Tax Convention on income and capital (Model Convention with Respect to Taxes on Income and on Capital), developed by the OECD (Organization for Economic Cooperation and Development).
Currently, Russia has signed tax agreements with more than 80 countries. Among them are many EU countries (including Cyprus, Great Britain, Ireland, Denmark, the Netherlands, Luxembourg, etc.), Switzerland, USA, China, CIS countries (including Ukraine, Belarus, Kazakhstan), Baltic countries (Latvia, Lithuania ) and a number of others (see complete list existing agreements for the avoidance of double taxation).
It is important to remember that in legal system Russia, the norms of agreements on the avoidance of double taxation (ratified and entered into force for Russian Federation), have priority over the provisions of tax legislation (as follows from Part 4 of Article 15 of the Constitution of the Russian Federation and Article 7 of the Tax Code of the Russian Federation). For example, if the Tax Code of the Russian Federation provides for a tax rate of 15%, and the agreement for the same income - a rate of 5%, then the rate established in the agreement will be applied (subject to the conditions stipulated in it).
Each state party to a tax treaty must provide a clear mechanism for its practical implementation by its taxpayers, including all formalities that must be completed by the taxpayer and the tax agent in order to take advantage of the benefits or exemptions provided for by the treaty. Practice shows that failure to comply with these formalities, their too loose interpretation or, conversely, a restrictive interpretation, can lead to the inability to timely take advantage of the benefits provided by tax treaties. or entail measures tax liability.
Confirmation of the permanent location of a foreign organization
Subclause 4 of clause 2 of Article 310 of the Tax Code of the Russian Federation provides that in the event of payment of income by a Russian organization foreign organization, for which, in accordance with international treaties (agreements), a preferential tax regime is provided in the Russian Federation, such income is subject to exemption from withholding tax at the source of payment or withholding tax at the source of payment at reduced rates, subject to presentation by the foreign organization to the tax agent confirmations, provided for in paragraph 1 of Article 312 of the Tax Code of the Russian Federation.In practice, such confirmation is often called “tax residence certificate”(tax residency certificate).
In accordance with paragraph 1 of Article 312 of the Tax Code of the Russian Federation, this confirmation must meet the following requirements:
- must be certified by the competent authority of the relevant foreign country;
- if this confirmation is drawn up in a foreign language, the tax agent is also provided with a translation into Russian language;
- confirmation must be provided by the foreign organization before the date of payment of income.
The Tax Code of the Russian Federation, establishing requirements for documents confirming the permanent residence of a foreign organization (clause 1 of Article 312), does not establish mandatory form such documents. The only act that contained requirements (sometimes redundant and not directly based on Tax Code norms) for the form and content of confirmation of permanent location for the purposes of double taxation agreements was Order of the Ministry of Taxes of Russia dated March 28, 2003 No. BG-3-23/150 “On approval Methodological recommendations to tax authorities on the application of certain provisions of Chapter 25 of the Tax Code of the Russian Federation concerning the peculiarities of taxation of profits (income) of foreign organizations." This order was canceled by the Order of the Federal Tax Service of Russia dated December 19, 2012, due to which the Methodological recommendations approved by it are not subject to application (although Formally, they were not obligatory for use by the taxpayer by virtue of paragraph 1 of Article 1 and paragraph 2 of Article 4 of the Tax Code of the Russian Federation).
These Methodological Recommendations will, apparently, be replaced either by additions to the Tax Code of the Russian Federation detailing the procedure for taxation of foreign organizations, or by a corresponding act of the Ministry of Finance, or both. For the information of readers, we present some provisions of this document that until recently retained their practical significance.
These recommendations stated that documents confirming the location of a foreign organization may be certificates in the form established by the internal legislation of that foreign state, as well as certificates in any form. The specified certificates are considered as confirming the permanent residence of a foreign organization if they contain the following or similar wording: “It is confirmed that the organization ... (name of the organization) ... is (was) during ... (specified period ) ... a person with permanent residence in ... (state is indicated) ... in the sense of the Agreement (name of the international treaty is indicated) between the Russian Federation/USSR and (foreign state is indicated)."
Clause 5.3 of the Methodological Recommendations indicated that documents confirming permanent residence are affixed with a seal (stamp) of a competent (or authorized by him) body of a foreign state in the sense of the relevant agreement on the avoidance of double taxation and the signature of the authorized official this organ. Specified documents subject to legalization in in the prescribed manner or such documents must be affixed with an apostille.
In addition, the Methodological Recommendations noted that documents such as certificates of registration in the territory of foreign states (certificates of incorporation), extracts from trade registers, etc., cannot be considered as documents confirming the permanent location of an organization for tax purposes in a foreign country.
The recommendations also stated that “the tax agent is provided with only one confirmation of the permanent location of the foreign organization for each calendar year of payment of income, regardless of the number and regularity of such payments, types of income paid, etc.”
Since some of the above provisions have often been called into question in judicial arbitration practice (a significant part litigation is connected specifically with the issues of documentary evidence necessary for the application of benefits and exemptions), we present the most significant positions of arbitration courts.
1) Confirmation of the permanent location of a foreign organization must be certified by the competent authority of a foreign state in the sense of the relevant double taxation agreement.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation (hereinafter referred to as the SAC RF) dated September 20, 2011 No. 5317/11 . A Russian closed joint-stock company successfully challenged in the Moscow Arbitration Court the decision of the Federal Tax Service to collect a fine, tax and penalties on income paid to a foreign company. As confirmation of the location of a foreign organization in the United States, the Moscow Arbitration Court accepted certificate (registration certificate) under the signature of the Secretary of the State of Vermont and the seal of that State, certified by a notary as a true copy of the record on file with the Bureau of the Secretariat of the State of Vermont. The Secretary of State has affixed an apostille on this certificate, certifying the actions of the notary. The translation of the said document into Russian was carried out by a translator, whose signature was certified by a notary of the Republic of Latvia. The 9th Arbitration Court of Appeal and the Federal Antimonopoly Service of the Moscow District left the decision of the 1st instance court unchanged. However, the Presidium of the Supreme Arbitration Court of the Russian Federation noted the following.
The competent authorities in the United States of America are the Secretary of the Treasury or his designee and the Service internal revenue USA (qualified to confirm tax residence in the USA).
In this case, the certificate of registration of a foreign organization in the state of Vermont determines its legal status as a business entity registered in the United States, however is not adequate confirmation permanent residence of the foreign organization in the United States within the meaning of the Double Tax Treaty, since the said evidence was not issued by the relevant competent authority foreign state.<...>
The Supreme Arbitration Court of the Russian Federation recognized as justified the arguments of the Federal Tax Service regarding the violation of the provisions of Chapter 25 of the Tax Code of the Russian Federation by the company and partially overturned the decisions of lower courts made in favor of the taxpayer.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 28, 2010 No. 9999/10. Having assessed the documents submitted by the company, the courts of first and cassation instances came to the reasonable conclusion that information on registering a limited liability company in the Republic of Cyprus And entry of another company into the Trade Register of the Canton of St. Gallen in Switzerland is not sufficient for them to acquire the status of permanent residents in order to avoid double taxation, since such information does not indicate that these persons are also tax residents data from foreign countries.” (At the same time, it is interesting that the court of appeal in this case, unlike the courts of the first and cassation instances and the Supreme Arbitration Court, proceeded from the fact that the provisions of the Tax Code of the Russian Federation “allow a foreign organization the right to choose a document that would confirm its permanent residence on the territory of a foreign state, since neither the norms of the Code nor any other legislative acts on taxes and fees, specific bodies of a foreign state have not been established that must issue confirmation of the permanent location of a foreign organization, as well as specific forms and texts of such documents.” This position, as we see, was refuted by higher authorities).
At the same time, judicial practice takes a balanced approach to cases when companies provide not only tax residence certificates, but also other documents (coming from both tax and non-tax authorities of foreign countries), one way or another indicating the permanent location of foreign companies in a certain state.
Determination of the Supreme Arbitration Court of the Russian Federation dated November 7, 2013 No. VAS-15167/13 . According to the MIFNS, tax exemption certificate German company and certificate of registration as a VAT payer in relation to another German company cannot be considered as evidence indicating the right to tax exemption in the Russian Federation, since they do not confirm the permanent location of foreign organizations in Germany. However, “the courts, based on the provisions of Chapter 25 of the Code and the Agreement between the Russian Federation and the Federal Republic of Germany on the avoidance of double taxation with respect to taxes on income and property dated May 29, 1996, recognized the documents submitted by the company in order to confirm the permanent location of its foreign counterparties in Germany, reliable and sufficient, Therefore, we concluded that the income received by companies from the company during the disputed period is not subject to taxation in the Russian Federation.” The Judicial Collegium of the Supreme Arbitration Court did not establish any violation by the courts of uniformity in the application of the provisions of Chapter 25 of the Tax Code of the Russian Federation.
Resolution of the Federal Antimonopoly Service of the Far Eastern District dated November 14, 2013 No. F03-5168/13 in case No. A73-31/2012 : along with certificates confirming the tax residence of companies in the Republic of Korea, during an on-site tax audit, documents were provided to confirm the permanent location of foreign companies signed by the bosses tax inspectorates two districts of the Republic of Korea business registration certificates, issued before the date of payment of income. Supreme Arbitration Court of the Russian Federation in his Determination dated March 26, 2014 No. VAS-716/13 did not establish a violation by the courts of uniformity in the application of the provisions of Chapter 25 of the Tax Code of the Russian Federation. The Supreme Arbitration Court, in particular, noted that, “guided by the provisions of Chapter 25 of the Code and the Convention between the Government of the Russian Federation and the Government of the Republic of Korea for the avoidance of double taxation with respect to taxes on income dated November 19, 1992, the courts recognized the documents submitted by the company in order to confirm the permanent location of its foreign counterparties in the Republic of Korea, reliable and sufficient, therefore, they concluded that the income received by foreign organizations from the company during the disputed period is not subject to taxation on the territory of the Russian Federation.”
2) Confirmation of the permanent location of the foreign organization must be provided before the date of payment of income.
Resolution of the Federal Antimonopoly Service of the Moscow District dated February 15, 2013 No. F05-15470/12 in case No. A40-59278/2012 . In this case, “all confirmations were issued after the actual payment of income to foreign organizations. Thus, on the dates of payment of income, the company, as a tax agent, had the obligation to withhold taxes from the income paid.” Whereas “a tax agent is exempt from withholding tax if he has confirmation of the residence of a foreign organization before the date of payment of income.” A similar position is also expressed in Resolution of the Federal Antimonopoly Service of the Moscow District dated July 16, 2013 No. F05-7227/13 in case No. A40-72223/2012 .
3) Is confirmation required every calendar year?
Until now, practice has in most cases answered this question in the negative.
For example, in Resolution of the Federal Antimonopoly Service of the Volga District of July 30, 2013 No. F06-5981/13 in case No. A12-29089/2012 it is noted that the tax authority’s reference to the fact that confirmation of the permanent location of a foreign organization must be presented annually is untenable, since this is not provided tax legislation.
The Russian Ministry of Finance in its Letter dated April 14, 2014 No. 03-08-RZ/16905 reported the following: “According to the literal interpretation of the provisions of paragraph 1 of Art. 312 of the Code, which provides for confirmation of the permanent location of a foreign organization, it does not contain rules limiting the period of validity of such confirmations, due to the fact that the income of a foreign organization is not tied to the tax period (which is confirmed by the practice of arbitration courts). The provisions of paragraph 1 of Art. 312 of the Code provides only that the confirmation must be submitted by the foreign organization before the date of payment of income, and not in each tax period.” However, “if during the period that has passed since the issuance of the confirmation, the permanent location of the foreign organization changes, ... the tax agent will be responsible for the correct calculation and withholding of tax.”
However, he demonstrated a completely different point of view FAS Moscow District in his Resolution of January 17, 2014 No. F05-16745/13 in case No. A40-16818/2013. “Since at the time of payment of income the company did not have a certificate of residence of the specified foreign company, relating to the specified tax periods, the applicant, by a contested decision, was brought to tax liability under Article 123 of the Tax Code of the Russian Federation and was assessed penalties on the income tax of foreign legal entities.”<...>“As established by the courts during the consideration of the case and not disputed by the applicant, the income of the above-mentioned foreign person was paid by the applicant in 2009 and 2010. At the time of payment of income the tax agent had a certificate residence of the counterparty dated 23.04.2008 in the Republic of Cyprus for 2008, which does not contain instructions to extend a similar conclusion regarding the status of residence for a future period. This certificate not justifiably accepted by the courts as a basis for exempting the tax agent from withholding tax at the source of payment at the time of payment of income.”
At the same time, immediately before formulating this conclusion, the FAS MO set out almost verbatim the exhaustive requirements of Article 312 of the Tax Code of the Russian Federation for confirming tax residency. It remains a mystery where the court decision came from with the requirement that the tax residency certificate relate to certain tax periods (apparently, from the same canceled “Methodological Recommendations” of the Ministry of Taxes of Russia 2003...)
Moreover, the Supreme Arbitration Court of the Russian Federation, in its Ruling dated April 28, 2014, refused to transfer this case for consideration by way of supervision to the Presidium of the Supreme Arbitration Court of the Russian Federation, motivating it as follows. “When adopting the contested acts, the courts based their conclusions on an assessment of the content of the disputed certificates, guided by paragraph 1 of Article 312 Tax Code and the legal position of the Presidium of the Supreme Arbitration Court of the Russian Federation, contained in Resolution No. 5317/11 dated September 20, 2011.<...>The applicant’s reference to judicial acts in other arbitration cases does not indicate a violation by the courts of uniformity in the interpretation and application of substantive law, taking into account the specific circumstances of the tax dispute established during the consideration of this case. The courts did not allow the incorrect application of the norms of substantive or procedural law, entailing the annulment of contested judicial acts.”
4) Should confirmation of the permanent location of a foreign organization be affixed with an apostille?
In general, the position of the courts confirms the need to affix an apostille on the following documents:
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 28, 2005 No. 990/05 . The Presidium of the Supreme Arbitration Court concluded that the documents submitted to the tax agent by foreign organizations (a certificate from the US Treasury Department on the location of the company in the USA; a certificate from the London Department of Internal Taxes that the company is subject to taxation in the UK; and a certificate from the UK Tax Office on the location companies in the UK) do not meet the requirements of the Convention (1961) for official documents, since they do not have an apostille. In this regard, the Presidium of the Supreme Arbitration Court noted that the documents submitted by the company as evidence confirming the location of foreign legal entities were not lawfully accepted by the tax authority.
However, exceptions are possible in relations with certain countries:
Resolution of the Federal Antimonopoly Service of the Moscow District dated February 15, 2013 No. F05-15470/12 in case No. A40-59278/2012. The company presented tax certificates issued by the Ministry of Finance of the Republic of Serbia, confirming the residence of the Serbian company. The certificates were presented without an apostille, and therefore were not accepted by the inspection as proper evidence. The courts considered that the certificates presented by the company are not subject to apostille, but the conclusion of the courts is erroneous. FAS MO indicated that the Treaty between the USSR and Yugoslavia “On Legal Assistance and legal relations in civil, family and criminal cases" dated February 24, 1962 (allowing the use of documents without legalization), “does not affect tax legal relations that are inherently related to administrative law.” FAS MO concluded that “documents submitted by foreign organizations to the tax authorities agent for the purpose of confirming permanent residence on the territory of the Republic of Serbia, must in accordance with the requirements of the Hague Convention contain an apostille”.
At the same time, the court noted that the Ministry of Finance of Russia, including through its authorized representative (FTS), mutually agreed with the competent authorities (their authorized representatives) of a number of foreign states on the procedure for accepting official certificates confirming permanent residence (residency) without legalization or apostille. List of such states, as well as forms of documents, samples of signatures of authorized persons and seals government agencies foreign states authorized to issue certificates of permanent residence are contained in the information base of the Federal Tax Service of Russia. Such states include the Republic of Belarus, Ukraine, the Republic of Moldova, the Republic of Kazakhstan, the Republic of Uzbekistan, the Kyrgyz Republic, the Republic of Tajikistan, the Republic of Armenia, the Azerbaijan Republic, the USA, the Republic of Cyprus, the Slovak Republic (see Letter of the Federal Tax Service of Russia dated May 12, 2005 No. 26-2-08/5988).
In certain cases, courts assume that apostille is not required:
Resolution of the Federal Antimonopoly Service of the Far Eastern District of January 29, 2014 No. F03-6693/13 in case No. A51-4992/2013. Rejecting the inspector's argument about the need to affix an apostille on documents submitted by a foreign (Japanese) company, the courts of both instances rightfully pointed out that the rules of tax legislation governing controversial legal relations provide for the foreign organization to submit to the tax agent a confirmation certified by the competent authority that this organization has a permanent residence in the state that has an international treaty with the Russian Federation. This condition has been met by society. In turn, the inspection did not provide a regulatory and legal basis for the requirement for the need to submit apostilled documents in the case under consideration.
Summarize.
- The authority of a foreign state competent in the sense of double tax treaties is usually the financial or tax authority (Ministry of Finance, tax service, Internal Revenue Service, etc.). Such competent authorities of the contracting countries are defined directly in the text of the agreement. Ministries of Justice, trade registers, etc. authorities cannot generally be considered competent for the purposes of tax treaties.
- Confirmation must be provided to the withholding agent prior to the date the income is paid.
- There is no requirement to provide confirmation annually (just as there is no uniformity in arbitration practice on this issue).
- On confirmation. By general rule, must be affixed with an apostille. The exception is confirmations coming from countries that have agreed with Russia, within the framework of the mutual agreement procedure provided for by the tax agreement, a simplified procedure for the mutual acceptance of such documents without an apostille. Treaties on legal assistance that provide for provisions on the mutual recognition of documents tax relations do not apply.
Thus, in practice, the following option is often used: the tax residence certificate received from a foreign counterparty (with an apostille) is translated into Russian; the authenticity of the translator's signature is certified by a notary; the translation is filed with the original. Then the required number of copies is made from the specified stitching, the accuracy of each of which is also certified by a notary.
Duties and responsibilities of a tax agent
In accordance with paragraph 2 of Article 287 of the Tax Code of the Russian Federation, a Russian organization (tax agent) paying income to a foreign organization withholds the amount of tax from the income of this foreign organization for each payment (transfer) to it Money or other receipt of income by a foreign organization, unless otherwise provided by the Tax Code of the Russian Federation.The tax agent is obliged to transfer the appropriate amount of tax no later than the day following the day of payment (transfer) of funds to a foreign organization or other receipt of income by a foreign organization.
In accordance with paragraph 4 of Article 310 of the Tax Code of the Russian Federation, the tax agent, based on the results of the reporting (tax) period, within the time limits established for the submission of tax calculations by Article 289 of the Tax Code of the Russian Federation, provides information on the amounts of income paid to foreign organizations and taxes withheld for the past reporting (tax) period in tax authority at its location in the form established by the Federal Tax Service of Russia.
The form of such calculation was approved by Order of the Ministry of Taxes of Russia dated April 14, 2004 No. SAE-3-23/286@ “On approval of the form of Tax calculation (information) on the amounts of income paid to foreign organizations and taxes withheld” (as amended by the Order of the Federal Tax Service of Russia dated December 18, 2013 No. ММВ-7-3/628@). Instructions for filling out tax calculations (information) on the amounts of income paid to foreign organizations and taxes withheld were approved by Order of the Ministry of Taxes of Russia dated June 3, 2002 No. BG-3-23/275 (as amended by Order of the Federal Tax Service of Russia dated December 18, 2013 No. MMV-7 -3/628@).
Tax agents submit tax calculations no later than 28 calendar days from the date of the end of the relevant reporting period. Tax calculations based on the results of the tax period, they are submitted by tax agents no later than March 28 of the year following the expired tax period (clauses 3 and 4 of Article 289 of the Tax Code of the Russian Federation).
At tax audit(including traveling) tax agent who applied a reduced tax rate, at the request of the tax authority, is obliged to provide confirmation of the location of the foreign organization - the recipient of the income.
It should be remembered that unlawful non-withholding and (or) non-transfer (incomplete withholding and (or) transfer) within the period established by the Tax Code of the Russian Federation of tax amounts subject to withholding and transfer tax agent, forms the composition tax offense and entails a fine of 20 percent of the amount subject to withholding and (or) transfer (Article 123 of the Tax Code of the Russian Federation).
Status of “actual recipient of income” as a condition for applying benefits provided by international tax treaties
Most agreements on the avoidance of double taxation, in articles establishing benefits or exemptions for certain categories of income, contain the wording: “a person having an actual right” to a particular income (in particular, dividends, interest, royalties). That is, it is assumed that such a person is the actual (ultimate) recipient of income paid to him from abroad.In this regard, the Ministry of Finance of Russia (in Letter dated April 9, 2014 No. 03-00-RZ/16236) made an explanation that marked a new approach to assessing the legality of taxpayers using benefits provided for in international tax agreements.
When applying agreements on the avoidance of double taxation in terms of granting the right to use benefits (reduced rates and exemptions) when taxing certain types of income from sources in the Russian Federation, it is necessary to assess whether the person applying for the use of benefits (reduced rates and exemptions) , “the actual recipient (beneficial owner)” of the relevant income.
The Russian Ministry of Finance indicated that the direct recipient of income, although he may qualify as a resident, cannot, for this reason alone, be considered by default as the beneficial owner of the income received in the state of residence.
Provision of income paid to a foreign person in the source state tax benefits(reduced rates and exemptions) is contrary to the purposes and objectives of international agreements if the recipient of such income, without formally using such instruments as agency or nominee, acts as an intermediate link in the interests of another person actually benefiting from the relevant income. Such an intermediate link, for example, a conduit (that is, intermediate, transit) company, cannot be considered as a person having an actual right to the income received, if, despite its formal status as the owner of income in a transaction with a person who is tax resident state - the source of income, such a company has very narrow powers in relation to this income, which allows it to be considered as a fiduciary or manager acting on behalf of interested parties.
To recognize a person as the actual recipient of income (beneficial owner), it is necessary not only to have legal grounds for directly receiving income, but this person must also be direct beneficiary that is, the person who actually benefits from the income received and determines his future economic fate. When determining the actual recipient (beneficial owner) of income, one should also take into account the functions performed and risks assumed by the foreign organization applying for benefits in accordance with international tax treaties.
According to the Ministry of Finance, provided for by agreements on the avoidance of double taxation privileges ( reduced rates and liberation) in relation to paid income from a source in the Russian Federation do not apply if they are paid as part of a transaction or series of transactions carried out in such a way that foreign person applying for benefits in the form of a reduced rate on dividends, interest and royalties, pays directly or indirectly all or substantially all income (at any time and in any form) to another person who would not have received the benefits (reduced rates and exemptions) under the relevant agreement if such income was paid directly to such person.
From all of the above, the following conclusions can be drawn:
1. When using the norms of agreements on the avoidance of double taxation, including when receiving confirmation from foreign counterparties about their permanent location, one should be guided, firstly, directly by the norms of the tax agreement itself, and secondly, by the norms of the Tax Code of the Russian Federation; and also take into account judicial and arbitration practice and explanations of financial authorities (if any). Compliance with all formalities associated with the application of a double taxation agreement can significantly reduce the risk of tax authorities challenging the legality of applying the benefits provided for by such an agreement;
A tax resident of Russia, obligated to pay tax in the Russian Federation on income from assets throughout the world, is considered to be someone who lives in the country for more than 183 days a year. In particular, many owners of foreign real estate fall under this definition, who can receive income from rental or sale of housing. If they are Russian tax residents, then a situation arises in which they must pay taxes both abroad (at the location of the object) and in Russia (at the place of their tax residence). However, the tax cannot be charged twice: it is paid only abroad, and the difference is counted in Russia. This is provided for by double taxation agreements.
Double taxation agreement - what is it?
A double tax treaty is a treaty concluded between two countries that sets out the rules by which taxes are levied on organizations and individuals in cases where the income-generating assets are not located in the country of residence of the income recipient.
The agreement on the avoidance of double taxation specifies the types of taxes that fall under the scope of the document, as well as the circle of persons to whom its rules apply. Also, such an agreement specifies the tax conditions, validity period and procedure for terminating the agreement. Russia has concluded double taxation agreements with 82 countries.
| Australia Austria Azerbaijan Albania Algeria Argentina Armenia Belarus Belgium Bulgaria Botswana Great Britain Hungary Venezuela Vietnam Germany Hong Kong (from 01/01/2017) Greece Denmark Egypt |
Israel India Indonesia Iran Ireland Iceland Spain Italy Kazakhstan Canada Qatar Cyprus Kyrgyzstan China DPRK Korea Cuba Kuwait Latvia Lebanon |
Lithuania Luxembourg Macedonia Malaysia Mali Malta Morocco Mexico Moldova Mongolia Namibia Netherlands New Zealand Norway Poland Portugal Romania Saudi Arabia Serbia Singapore Syria |
Slovakia Slovenia USA Tajikistan Thailand Turkmenistan Türkiye Uzbekistan Ukraine Philippines Finland France Croatia Montenegro Czech Chile Switzerland Sweden Sri Lanka South Africa Japan |
“As for, for example, income in Estonia or other countries with which Russia has not concluded an agreement to avoid double taxation, residents of the Russian Federation pay taxes twice, in both countries. If Estonian legislation provides for the collection of tax from a non-resident, then the amount paid will not be taken into account in the Russian Federation, since the actual amounts of tax paid on income received in a foreign country are not counted when paying tax in Russia, unless otherwise provided by the relevant international treaty signed by the Russian Federation “says Tranio lawyer Ekaterina Shabalina.
For buyers and owners of foreign real estate, agreements on the avoidance of double taxation are important primarily because they allow tax to be offset in Russia on rental income when selling such property.
How is tax taken into account when receiving rental income?
“If a Russian resident receives income from real estate located, for example, in Germany, the amount of tax paid in Germany will be deducted from the amount of tax payable in Russia. The tax amount is calculated according to Russian tax law(at a rate of 13% and established rules) and is deducted from the amount paid foreign tax. It should be remembered that the deduction cannot exceed the amount of tax calculated in Russia. Accordingly, if the amount of tax in the state of the source of income was paid in a smaller amount than was calculated in Russia, then the missing part will have to be paid in the Russian Federation,” explains Ekaterina Shabalina.
If you receive rental income, you must independently declare it in Russia by submitting a declaration in form 3-NDFL (sheet “B”, or income from sources outside the Russian Federation) to the tax authority at your place of residence.
Attached to the tax return:
- issued to foreign tax documents, confirming the amount of income received and the tax paid on it, as well as their notarized translation into Russian. These documents must reflect the type of income, its amount, the calendar year in which the income was received, the amount of tax and the date of its payment.
- or a copy of a tax return filed abroad with a copy payment document about payment of tax (all this must also be translated into Russian and notarized).
“The amount of tax paid abroad is credited only after filing this declaration, at the end of the tax period. You can report your income and receive a tax credit within three years after the end of the reporting year in which income was received,” says Ekaterina Shabalina.
For example, a Russian tax resident owns German real estate, which brings in 10 thousand euros per year as rental income. Sum income tax in Germany it will be 2,324 euros (the rate is 23.24% of rental income, taking into account the surcharge to support solidarity), in Russia - 1,300 euros (13%). Since the amount of 1,300 euros is less than 2,324, the property owner will not have to pay anything additional in the Russian Federation.
At the same time, deductions received abroad are not taken into account when calculating the taxable amount in Russia. Let’s say a Russian rents out a house in France and receives 18 thousand euros per year. According to French law, he has the right to deduct 50% from the taxable amount due to housing costs. Therefore, 9 thousand euros are subject to tax on rental income. Minimum bid for non-residents - 20%. This means that a Russian pays tax in the amount of 1,800 euros per year. Since Russia does not have a similar system of deductions when paying taxes, you would have to pay the full amount of 18 thousand euros at a rate of 13%, that is, 2,340 euros per year. But since there is an agreement between Russia and France to avoid double taxation, a Russian needs to pay tax in France, and in the Russian Federation only pay the difference - 540 euros.
It is also important to know that when paying tax in Russia under a simplified taxation scheme, you cannot receive a foreign tax credit, and in this case the taxation will be double.
How is tax taken into account when selling foreign real estate?
According to the Federal Tax Service letter No. ED-3-3/4062@ dated November 9, 2012, the legislation of the Russian Federation does not distinguish between the sale of real estate in Russia and abroad - the same rules apply in both cases.
According to Ekaterina Shabalina, income received from the sale of foreign real estate is not subject to taxation, and the seller is not required to file tax return in Russia in two cases:
- for properties purchased before January 1, 2016: if real estate is being sold that has been owned for more than three years;
- for objects purchased after January 1, 2016: if real estate is being sold that has been owned for more than five years (general case) or three years (if the taxpayer received the object by inheritance or as a gift from a relative or family member, under a lifelong dependency agreement) .
Tax exemption can be obtained if the property is not used for entrepreneurial activity. The definition of entrepreneurial activity was given by the Federal Tax Service in letter No. ED-3-3/412@ dated February 8, 2013.
If the seller does not fall under the above conditions, then he needs to submit a tax return in Form 3-NDFL by April 30 of the year following the year the income was received, and pay the tax by July 15.
Like tax on rental income, tax on sales income can be credited in Russia as part of the elimination of double taxation. For Russian residents the rate is 13%.
For example, in 2010, a Russian resident decided to buy an apartment in Spain for 500 thousand euros, and in 2016 he sold it for 550 thousand. Capital gains - 50 thousand euros - are subject to Spanish tax at a rate of 24%. The tax amount in this case is 12 thousand euros. Since more than three years passed between the purchase and sale, according to Russian legislation, you don’t need to file a declaration in the Russian Federation, just pay tax in Spain.
It is important to remember that tax evasion is a criminal offense. Paying taxes abroad at a lower rate than in Russia, and not filling out a tax return at home, is illegal.
Yulia Kozhevnikova, Tranio
16.05.2016
Applications of double taxation agreements concluded by the Russian Federation.
Currently, agreements on the avoidance of double taxation have been signed by Russia with more than 80 states. Among them are many EU countries, including Cyprus, Great Britain, Denmark, the Netherlands; Switzerland; USA; China; CIS countries, incl. Ukraine, Belarus, Kazakhstan; Baltic countries - Latvia, Lithuania and a number of others (see List of existing agreements on the avoidance of double taxation).
IMPORTANT: If an international tax agreement provides for a different tax rate than that provided for by the Tax Code of the Russian Federation, then the rate specified in the double taxation agreement is applied!
Let us dwell on some of the most significant aspects of the application of international tax agreements in Russia.
Responsibilities of a tax agent
Responsibility for the correct calculation and withholding of tax at source (including the correct application of benefits (reduced rates and exemptions) provided for by international tax agreements lies with the tax agent.
According to the Tax Code of the Russian Federation, tax on income received by a foreign organization from sources in the Russian Federation is calculated and withheld by a Russian organization (tax agent), paying income to a foreign organization, with each payment of income, in the currency of payment of income. The exception is when:
- the income paid relates to the permanent establishment of the foreign organization receiving the income in the Russian Federation;
- in relation to income paid to a foreign organization, Article 284 of the Tax Code of the Russian Federation provides tax rate 0%;
- income, in accordance with international treaties of the Russian Federation, is not taxed in the Russian Federation (subject to the foreign organization presenting to the tax agent the confirmation provided for in paragraph 1 of Article 312 of the Tax Code of the Russian Federation);
- in some other cases provided for in paragraph 2 of Art. 310 Tax Code of the Russian Federation.
It should be remembered that unlawful failure to withhold and (or) transfer (incomplete withholding and (or) transfer) within the period established by the Tax Code of the Russian Federation of tax amounts subject to withholding and transfer by a tax agent constitutes a tax offense and entails a fine of 20 percent of the amount. subject to withholding and (or) transfer (Article 123 of the Tax Code of the Russian Federation), as well as penalties (on the issue of collecting penalties from a tax agent, see Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation No. 4047/06 of September 26, 2006).
Confirmation of the permanent location of a foreign organization
Subparagraph 4 of paragraph 2 of Article 310 of the Tax Code of the Russian Federation provides that in the event of a Russian organization paying income to a foreign organization for which, in accordance with international treaties (agreements), a preferential tax regime is provided in the Russian Federation, such income is exempt from withholding tax at the source of payment or withholding tax at source of payment at reduced rates, subject to presentation by the foreign organization to the tax agent confirmations, provided for in paragraph 1 of Article 312 of the Tax Code of the Russian Federation.
In accordance with paragraph 1 of Art. 312 of the Tax Code of the Russian Federation, the specified confirmation must meet the following requirements:
- must be certified by the competent authority of the relevant foreign state,
- if this confirmation is drawn up in a foreign language, the tax agent is also provided with a translation into Russian,
- confirmation must be provided by the foreign organization before the date of payment of income.
Thus, if at the time of payment of income to a foreign organization, the Russian organization - the source of payment of income does not have the specified confirmation, then it is obliged to withhold tax at the source of payment at the rate established by law.
Moreover, if the specified confirmation appears at the disposal of the tax agent later, it is possible to refund the previously withheld tax on income paid to foreign organizations in accordance with clause 2 of Art. 312 of the Tax Code of the Russian Federation. To do this, the following documents must be submitted to the tax authority:
Application for refund of withheld tax in the prescribed form;
Confirmation that this foreign organization at the time of payment of income had a permanent location in the state with which the Russian Federation has an international treaty (agreement) regulating taxation issues;
Copies of the agreement (or other document) in accordance with which income was paid to the foreign legal entity, and copies of payment documents confirming the transfer of the amount of tax to be refunded to the budget;
An application for the return of amounts of taxes previously withheld in the Russian Federation, as well as other documents listed above, are submitted by the foreign recipient of income to the tax authority at the place of registration as a tax agent within three years from the end date in which the income was paid.
Status of “actual recipient of income” as a condition for applying benefits under double taxation agreements
When applying agreements on the avoidance of double taxation in terms of granting the right to use benefits (reduced rates and exemptions) when taxing certain types of income from sources in the Russian Federation, it is necessary to assess whether the person applying for the use of benefits (reduced rates and exemptions) , “the actual recipient (beneficial owner)” of the relevant income.
International tax treaties are based on the Model Convention on Taxes on Income and Capital) and on the official commentaries thereto, containing the interpretation of its provisions.
When applying the provisions of tax treaties, it is necessary to proceed from the fact that the term “actual recipient (beneficial owner) of income” is not used in a narrow technical sense, but should be understood based on the goals and objectives of international tax treaties, such as, for example, avoidance of double taxation and evasion from paying taxes, and taking into account such basic principles of treaties as prevention of abuse of treaty provisions and the predominance of substance over form. At the same time, the direct recipient of the income, although he may qualify as a resident, cannot for this reason alone by default be considered as the beneficial owner of the income received in the state of residence.
Providing tax benefits (reduced rates and exemptions) in the source state of income paid to a foreign person also contradicts the goals and objectives of international agreements if the recipient of such income, without formally using such instruments as agency or nominal holding, will act as an intermediate link in the interests of another the person actually benefiting from the relevant income. Such an intermediate link, for example a conduit company, cannot be considered as a person having an actual right to the income received, if, despite its formal status as the owner of the income in a transaction with a person who is a tax resident of the state where the income is sourced, such a company has very narrow powers in relation to this income, which allows it to be considered as a trustee or manager acting on behalf of interested parties.
To recognize a person as the actual recipient of income (beneficial owner), it is necessary not only to have legal grounds for directly receiving income, but this person must also be direct, that is, the person who actually benefits from the income received and determines his future economic fate. When determining the actual recipient (beneficial owner) of income, one should also take into account the functions performed and risks assumed by the foreign organization applying for benefits in accordance with international tax treaties.
Provided for by double taxation agreements benefits (reduced rates and exemptions) in relation to paid income from a source in the Russian Federation do not apply if they are paid as part of a transaction or series of transactions carried out in such a way that foreign person applying for benefits in the form of a reduced rate of interest and royalties, pays directly or indirectly all or substantially all of the income (at any time and in any form) to another person who would not have received the benefits (reduced rates and exemptions) under the relevant tax treaty if such income was paid directly to such person.
Thus, the position of the Russian Ministry of Finance is that the benefits (reduced rates and exemptions) provided for by double taxation agreements when paying income in the form of dividends, interest and income from the use of copyrights from sources in the Russian Federation apply only if a resident of a foreign state with which Russia has concluded a corresponding agreement is the actual recipient of the income.
Application of double taxation agreements in other countries
“Classical” offshore zones rarely have concluded agreements for the avoidance of double taxation, which can be used to optimize the payment of income to non-resident entities. Therefore, low-tax and onshore jurisdictions, such as Cyprus, Great Britain, Denmark, the Netherlands, other European countries, etc., are suitable for the application of tax treaties.
Eg, Great Britain has the world's largest network of tax treaties (more than 100). However, the application of tax agreements is possible only if the company is not a nominee, that is, it is not an agent of the offshore principal company, which owns the majority of the profit (income) received. Only if the income is recognized as income of the English company can it claim to benefit from the agreement. Of course, it is impossible to apply a tax treaty by a company filing “sleeping reports” - dormant accounts. It is possible to use agreements in holding schemes.
One of the countries most suitable for the application of international tax agreements, as before, remains Republic of Cyprus(has more than 40 existing agreements). A tax residence certificate is issued by the Ministry of Finance at any time after company registration. An important condition for obtaining a certificate is the presence of local directors - residents of Cyprus.
Tax residency certificates are also issued in other jurisdictions. significant for tax planning (Denmark, the Netherlands, Luxembourg, Latvia, Malta and other countries). However, important factor What influences the possibility of obtaining a tax certificate is the company’s presence of “real content” (substance) in the territory of the country of registration.
Criteria for such presence. which a company must meet in order to be considered a tax resident of its country may be the following:
- presence of a real office at a real address in the country of registration of the company;
- the presence of local directors (residents of the country of registration of the company) who manage the company in the territory of this country;
- Availability bank account(main) in local bank;
- storage of financial documentation and reporting in an office in the country of registration of the company;
- availability of staff;
- carrying out real activities, etc.
The extent of such presence may vary depending on the company's objectives (eg trading or holding activities).
Double Taxation Agreement, concluded between countries, reduces the tax burden on taxpayers. To date, Russia has concluded more than 80 suchdouble taxation agreementswith various states.
Double taxation in Russia
To avoid double taxation, the Russian government enters into agreements with the governments of other countries that help develop relations between residents of these two countries when making transactions. Such double tax treaties help relieve a business from the exorbitant tax burden that can arise when paying income from a resident of one country to a resident of another country.
In these agreements on the avoidance of double taxation, by agreement at the international level, certain types of transactions are exempted by one of the countries from paying tax or some preferential conditions are established for the payment of this type of income tax. After all, the tax on this income, for example, has already been paid in the country in which the taxpayer (tax agent) paying remuneration to his foreign partner is located.
In Russia, paragraph 1 of Art. 7 of the Tax Code establishes the priority of an international agreement over domestic tax legislation. This means that if, in accordance with the norms of the Tax Code, the tax rate is set at 10%, and in an international agreement - 5%, then the taxpayer has the right to apply the rate established by the international agreement. However, in this case, it is mandatory to comply with all the conditions specified in the international treaty.
Conditions for obtaining tax benefits in international transactions
Among the conditions established by Russian tax legislation for the application of preferential taxation in accordance with the terms of international agreements on the avoidance of double taxation, the main one is confirmation of the fact that the counterparty is located abroad. We are talking about a foreign partner of a Russian taxpayer, to whom the latter pays income. This is indicated in sub. 4 p. 2 tbsp. 310 NK. The taxpayer will also need to prove that his partner is the actual recipient of the profit and not an intermediary.
In paragraph 1 of Art. 312 of the Tax Code states that the foreign partner is obliged to provide the Russian tax agent with evidence that he is the actual beneficiary and that he is located on the territory of the state with which Russia has concluded a double tax treaty.
If the supporting documents are drawn up in a foreign language, then you will need to worry about translating them into Russian. Also, fiscal authorities in most cases require that documents have an apostille. In order for the tax agent not to withhold tax on a foreigner's income (or to apply preferential tax treatment), it is necessary that all of the above supporting documents be provided before the income is paid.
If they are provided later, income tax will be withheld in accordance with Russian tax legislation. But later, upon provision of documents, the paid tax can be returned and additional income can be paid to the foreign partner.
So, what documents must a foreign partner provide to avoid double taxation? In paragraph 1 of Art. 312 of the Tax Code provides an exhaustive list of such documents:
- confirmation certified by a competent foreign authority (this includes financial and fiscal departments of foreign states) about the permanent presence of a resident in a given foreign state (+ translation into Russian);
- documentary evidence that the foreign recipient of the income has the actual right to it.
However, neither in this paragraph nor anywhere else in the Tax Code is there a clear indication of what requirements are imposed on the form of documents. Typically, such supporting documents are referred to as “Tax Residency Certificates.”
Previously, the requirements for the form of documents and other issues that should have been given attention regarding the specifics of providing supporting documents to the fiscal service authorities were collected in a “manual” compiled by the Federal Tax Service and set out in the order of the Ministry of Taxes and Duties dated March 28, 2003 No. BG-3- 23/150. But the data guidelines lost their validity on the basis of the order of the Federal Tax Service dated December 19, 2012 No. ММВ-7-3/980@.
On this moment The Federal Tax Service has not issued new clarifications on this issue, so it has become more difficult for taxpayers to work through each specific situation. Thus, today taxpayers are forced not only to study all available explanations from the financial and fiscal departments on the issue of interest, but also to study the existing judicial practice.
Judicial practice on issues of avoiding double taxation
Let's look at some situations for which there is already established judicial practice:
- About which body is considered competent when certifying confirmation of the permanent location of a foreign company.
The Supreme Arbitration Court's ruling No. BAC-15167/13 dated 07.11.2013 established that certificates of registration of a foreign company as a payer of value added tax and tax exemption issued by the German fiscal service are not necessary confirmation of the company's permanent location in Germany. However, the courts reviewing these documents previously considered these documents sufficient for exemption from income tax in Russia in accordance with the international agreement. The Supreme Court did not find any violations in these findings.
In the ruling of the Supreme Arbitration Court dated March 26, 2014 No. VAS-716/13, the judges did not find any violations in the arguments of the FAS DO (resolution dated November 14, 2013 No. F03-5168/13), which concluded that the company registration certificates provided by Korean taxpayers, signed by the bosses fiscal services of 2 districts of Korea are reliable confirmation of the permanent location of foreign counterparties.
For more information on how companies can confirm their permanent location, read our article .
- Providing confirmation before the date of receipt of income.
The resolution of the Federal Antimonopoly Service of Moscow dated February 15, 2013 No. F05-15470/12 states that tax withholding on the income of a foreign partner must be carried out by a tax agent from Russia, since supporting documents were provided after the moment of payment of income.
More more information O judicial practice on this issue you will find in our article .
Read our article about the procedure for calculating penalties from the Federal Tax Service for late provision of supporting documents. .
And another case of providing documents later than the deadline for payment of income by the source is discussed in our article .
- On the annual provision of confirmations.
The resolution of the Federal Antimonopoly Service of Moscow dated January 17, 2014 No. F-05-16745/13 states that if the supporting document does not indicate the validity period for other tax periods, then it cannot be accepted as justification in other tax periods. At the same time, the letter of the Ministry of Finance dated April 14, 2014 No. 03-08-R3-016905 states that Art. 312 of the Tax Code there are no provisions on limiting the validity period of the provided confirmations.
- About affixing an apostille.
In their decisions, the courts adhere to the position chosen by the Presidium of the Supreme Arbitration Court and set out by it in Resolution No. 990/05 of June 28, 2005 (at that time the methodological recommendations were still in force) on the mandatory affixing of an apostille. The decision was dictated by the requirement for compliance with the 1961 Convention. Recent decisions of arbitration courts also state that the presence of an apostille is mandatory (Resolution of the Federal Antimonopoly Service of the Moscow Region dated February 15, 2013 No. F05-15470/12).
Treaties for the avoidance of double taxation
Many countries need to conclude an international agreement that would relieve tax payers carrying out interstate financial transactions from double taxation. Such agreements usually define the terms for the distribution of tax treatment of various incomes between states.
Also, these agreements determine the procedure for taxing income at the source of its payment. Typically, income is fully exempt from withholding taxes, although there may be options to reduce it.
Each of the international agreements on the avoidance of double taxation signed by Russia (there are 83 of them in total as of 2017) has its own unique content. But in Lately There is a trend towards unification of such agreements all over the world. It is expected that the texts of the agreement will be unified in accordance with the postulates set out in the Model Convention developed by the Organization for Economic Cooperation and Development.
International agreements for the avoidance of double taxation (Cyprus and other countries)
An international agreement for the avoidance of double taxation (hereinafter in the table - DTA) is signed by the Government of Russia with the government of another foreign state. Moreover, the date of conclusion of a bilateral international treaty usually does not coincide with the date of entry into force, as well as the date of application in one and in another country.
To understand all these important nuances, we suggest that you familiarize yourself with the list of all prisoners Russian government bilateral agreements aimed at eliminating double taxation of income in two cooperating countries.
|
A foreign state is a partner under the DTA |
Document type |
Date of signing of the agreement |
Date of entry into force of the DTA |
Date of commencement of application of SDN in Russia |
Start date of application of the DTA in the partner country |
|||
|
Republic of Austria |
Convention |
|||||||
|
Kingdom of Belgium |
Convention |
|||||||
|
Republic of Bulgaria |
Agreement |
|||||||
|
Hungarian Republic |
Convention |
|||||||
|
United Kingdom of Great Britain and Northern Ireland |
Convention |
|||||||
|
Hellenic Republic |
Convention |
|||||||
|
Republic of Germany |
Convention |
05/29/1996 (as amended on 10/15/2007) |
||||||
|
Kingdom of Denmark |
Convention |
|||||||
|
Italian Republic |
Convention |
|||||||
|
Ireland |
Agreement |
|||||||
|
The Kingdom of Spain |
Convention |
|||||||
|
Republic of Cyprus |
Agreement |
12/05/1998 (as amended on 10/07/2010) |
||||||
|
Grand Duchy of Luxembourg |
Agreement |
06/28/1993 (as amended on 11/21/2011) |
||||||
|
Convention |
||||||||
|
Kingdom of the Netherlands |
Agreement |
|||||||
|
Portuguese Republic |
Convention |
|||||||
|
Republic of Poland |
Agreement |
|||||||
|
Convention |
||||||||
|
Republic of Slovenia |
Convention |
|||||||
|
The Slovak Republic |
Agreement |
|||||||
|
French Republic |
Convention |
|||||||
|
Republic of Finland |
Agreement |
05/04/1996 (as amended on 04/14/2000) |
||||||
|
Republic of Croatia |
Agreement |
|||||||
|
Czech Republic |
Convention |
11/17/1995 (as amended on 04/27/2007) |
||||||
|
Kingdom of Sweden |
Convention |
|||||||
|
Latvian republic |
Agreement |
|||||||
|
Republic of Lithuania |
Agreement |
|||||||
|
Kingdom of Norway |
Convention |
|||||||
|
Swiss Confederation |
Agreement |
11/15/1995 (as amended on 09/24/2011) |
||||||
|
Republic of Albania |
Convention |
|||||||
|
Republic of Iceland |
Convention |
|||||||
|
Republic of Macedonia |
Agreement |
|||||||
|
Serbia and Montenegro (former Yugoslavia) |
Convention with the Federal Republic of Yugoslavia |
|||||||
|
Republic of Mali |
Convention |
|||||||
|
Agreement |
||||||||
|
Republic of Cuba |
Agreement |
|||||||
|
Federative Republic of Brazil |
Convention |
In accordance with the letter of the Ministry of Finance dated February 12, 2014 No. 03-08-06/5641, it is known that the Convention has not entered into force and is not applied |
||||||
|
Argentine Republic |
Convention |
|||||||
|
Republic of Botswana |
Convention |
|||||||
|
Bolivarian Republic of Venezuela |
Convention |
|||||||
|
Republic of Chile |
Convention |
|||||||
|
Agreement |
||||||||
|
Agreement |
||||||||
|
Islamic Republic of Iran |
Agreement |
|||||||
|
Arab Republic of Egypt |
Agreement |
|||||||
|
State of Israel |
Convention |
|||||||
|
Algerian People's Democratic Republic |
Convention |
|||||||
|
State of Kuwait |
Agreement |
|||||||
|
Lebanese Republic |
Convention |
|||||||
|
Kingdom of Saudi Arabia |
Convention |
|||||||
|
Syrian Arab Republic |
Agreement |
|||||||
|
Turkish Republic |
Agreement |
|||||||
|
Republic of Indonesia |
Agreement |
|||||||
|
Republic of India |
Agreement |
|||||||
|
Socialist Republic of Vietnam |
Agreement |
|||||||
|
Convention |
||||||||
|
Kingdom of Thailand |
Convention |
|||||||
|
Republic of the Philippines |
Convention |
|||||||
|
Mongolia |
Agreement |
|||||||
|
Kingdom of Morocco |
Agreement |
|||||||
|
People's Republic of China |
Agreement |
10/13/2014 (as amended on 05/08/2015) |
||||||
|
The Republic of Korea |
Convention |
|||||||
|
Agreement |
||||||||
|
Malaysia |
Agreement with the USSR |
Information is absent |
||||||
|
Republic of Singapore |
Agreement |
09.09.2002 (as amended on 17.11.2015) |
||||||
|
Agreement |
||||||||
|
Republic of Namibia |
Convention |
|||||||
|
Democratic Socialist Republic of Sri Lanka |
Agreement |
|||||||
|
Australia |
Agreement |
|||||||
|
New Zealand |
Agreement |
|||||||
|
The Republic of Uzbekistan |
Agreement |
|||||||
|
The Republic of Tajikistan |
Agreement |
|||||||
|
Turkmenistan |
Agreement |
|||||||
|
The Republic of Moldova |
Agreement |
|||||||
|
Kyrgyz Republic |
Agreement |
|||||||
|
Republic of Armenia |
Agreement |
12/28/1996 (as amended on 10/24/2011) |
||||||
|
The Republic of Azerbaijan |
Agreement |
|||||||
|
Agreement |
||||||||
|
Republic of Belarus |
Agreement + Protocol |
04/21/1995 (minutes - 01/24/2006) |
||||||
|
The Republic of Kazakhstan |
Convention |
|||||||
|
Agreement |
||||||||
|
Hong Kong Special Administrative Region of the People's Republic of China |
Agreement |
|||||||
The fundamental differences are in how they are called international document- convention, agreement or treaty, no. All these names indicate that the parties have established certain obligations. In fact, these are all synonyms.
Results
To reduce the tax burden of Russian businessmen, the Russian government enters into agreements on the avoidance of double taxation with the leadership of other countries. These agreements take precedence over the tax legislation of the Russian Federation. But in order to apply them, the Russian taxpayer and its counterparty must comply with all the terms of the international agreement and provide the documents accompanying the transaction to the Federal Tax Service.
