Russia Grants New Incentives & Tax Treaty Benefits to Foreign Companies

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Last month the Russian Federal Tax Service released details regarding a relaxation in regulations towards foreign holding companies in Russia. Going forward, non-resident companies are no longer required to demonstrate active business operations in order to be eligible for tax treaty exemptions and the accompanying reduced withholding tax rates.

Companies within a multinational group whose activities entail solely holding or investment functions will now be treated as beneficial owners as long as they can prove that their activities are for business purposes as opposed to artificial for tax reduction purposes.