The Ministry of Finance (MoF) has released Letter No. 03-03-06/1/68300 describing the process to calculate the taxable income of controlled foreign companies (CFCs) for the purposes of taxation in Russia. The letter was issued on 29th December 2014. According to Article 309.1 of the Tax Code, the taxable income is calculated under the CFC’s national law, provided that:
- Under the CFC’s national law the financial statements are obligatory.
- The jurisdiction in which the CFC is registered has concluded a tax agreement with Russia.
According to the MoF clarification, if any of the above criteria are not satisfied, the CFC’s taxable income would be calculated under the Russian rules set out in the Tax Code.
