Contributed by Vladislav Donchenko, tax partner in Lex Alliance, Russian
Vice President of AITC Gaspard Brule spoke at the international exhibition-forum "International Day of Import and Export" together with the Lex Alliance team (Russian AITC partner)
Gaspard Brule, vice President of AITC, and the team of the Russian AITC member Lex Alliance law company (http://lex-alliance.com/) held a joint master-class "Tax and legal aspects of foreign economic activity" on November 19, 2020 as part of the international exhibition-forum "International Day of Import and Export" (https://importexport.group/autumneng).
Gaspard highlighted the key features of the French tax system and ways to improve tax efficiency for French companies.
Colleagues from the tax practice of Lex Alliance, represented by partner Vladislav Donchenko and expert adviser Natalia Bukharina, spoke about the features of the product traceability system currently being created within the EAEU, current trends in tax control and recent changes in tax and currency legislation, including the features of an accelerated procedure for VAT refunds. The speakers also analyzed the main mistakes that companies make when refunding VAT.
Rim Adelshin, partner of the corporate law practice Lex Alliance, highlighted the issues related to the creation of an optimal corporate infrastructure and minimization of risks associated with its insufficient development.
Arthur Leer, Managing Partner of Lex Alliance, moderated the discussion.
The Association of International Tax Consultants - AITC and the Lex Alliance law firm express their gratitude to the management of the Association of Exporters and Importers (https://exporterimporter.ru/aeieng) (Andrey Podenok, President of the Association, Pavel Dolgov, Vice President and Irina Zassedatel´, Advisor to the President) for the brilliant organization of the forum.
The video recording of the master class and slides of the speakers will be posted in the near future in the public domain.
The exhibition-forum "International Day of Export and Import" is organized twice a year (in spring and autumn) by the Association of Exporters and Importers (https://exporterimporter.ru/aeieng) with the support of the Moscow Association o Entrepreneurs (https://www.moomap.ru), one of the oldest associations of Russian entrepreneurs.
Amended version of DTT between Russia and Luxembourg will come into force from 2021
On November 6, Russian Mistry of finance signed protocol with Luxembourg amending double tax treaty from 2021 between Russia and Luxembourg in terms of increasing the tax to 15% at the source of income in the form of dividends and interest.
The preferential dividend rate (5%) will remain for dividends received by
(i) Luxembourg public companies (15% of shares are listing; controlled share in the capital of Russian company is not less than 15% within 365 days);
(ii) pension funds and insurance companies;
(iii) State authorities, central bank
The interest income paid by a Russian company should be exempted from taxation at source if the recipient of such interest income is
(i) a pension fund, an insurance company;
(ii) state authority;
(iii) a bank or central bank;
Furthermore, the interest income paid by a Russian company should be exempted from taxation at source if interest income is related to the following listing securities: state bonds, corporate bonds, external bond loans (Eurobonds).
The interest income paid by a Russian company should be taxed at the rate 5% at source if the recipient is a Luxembourg public company (15% of shares are listing; controlled share in the capital of Russian company is not less than 15% within 365 days).
For other cases, 15% WHT rate should be applied.
Please note that DTT between Russia and Luxembourg is subject to MLI convention that will be applied by Russian tax authorities starting from 2021.
How Lex Alliance can help you
Lex Alliance tax team will be glad to assist you with the following issues:
· Analysis of international structures on tax risks arising due to changes in Russian DTT
· Analysis of possibility to apply look through approach within distribution of passive income from Russia
· Development of recommendations aimed on tax risks mitigation in respect of modification of international structures
· CFC compliance in Russia