23.06.08

Companies with representation offices abroad should carefully study Letter # 03-08-05, issued by the Ministry of Finance (MinFin) on May 23, 2008. It explains procedures for deducting taxes paid in foreign countries from a Russian tax base.

The Ministry explains that such deductions can only be made for taxes paid in countries which have which have entered into a tax treaty with Russia. Based on that treaty, tax expenses may be deductible including profits tax and tax on capital based on aggregate income, profit taxes on property sales; payroll taxes, and capital gain taxes. According to Russian legislation, profits tax paid in a foreign country not holding a tax treaty with the RF may not be deducted.

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Source: Российский налоговый портал