The Ministry of Finance (MoF) has recently released Letter No. 03-03-06/1/63388 to clarify the applicable tax treatment of interest expense incurred on a loan used to pay dividends. According to Article 252 of the Tax Code (TC) a taxpayer may deduct all expenses paid or accrued during a tax year necessary to carry on a business aimed at profit making. Also, a taxpayer may record as “non-operating expenses” interest payments made under debt obligations subject to thin capitalization rules on the basis of Article 265 of the TC. The MoF explained that the provisions of Article 265 of the TC do not contain any limitations (except for the thin capitalization rules as set out in Article 269) on the deductibility of interest amounts on the loan used to pay dividends for corporate income tax purposes and recorded as “non-operating expenses”.
«
Bulgaria: New Accounting Act gazetted
Related Posts
Russia amends Tax Code, increases corporate income tax rate
Russia has introduced several changes to its Tax Code, effective starting 1 January 2025, which includes changes to the corporate income tax rate, simplified tax regime and tourist tax. The corporate income tax (CIT) rate has been raised
Read More Russia updates tax information exchange list
Russia’s Federal Tax Service (FTS) has updated its lists of jurisdictions for tax information exchange, effective 31 December 2024. The new changes were announced through two decrees, No. IED-7-17/914 and IED-7-17/916, published on 20 December
Read More Russia expands list of agricultural seeds eligible for reduced VAT rate
The Russian government has issued Resolution No. 3596-r, expanding the list of agricultural crop seeds treated with biological or chemical agents that are subject to a reduced VAT rate of 10% upon sale and import. The resolution, which came into
Read More Russia: MoF clarifies loss carry-forward rules for CFCs redomiciled as international companies
The Russian Ministry of Finance (MoF) clarified in Guidance Letter No. 03-12-11/2/107192, published on 9 December 2024 that, under certain conditions, losses can be carried forward by a controlled foreign company (CFC) registered in Russia and
Read More Russia introduces reduced corporate income tax rate for electronics manufacturers
Russian companies manufacturing equipment for electronic components and radio-electronic products will benefit from a reduced 8% corporate income tax rate starting 1 January 2025. This tax incentive is part of government Resolution No. 1848,
Read More Russia updates CbC reporting jurisdictions
The Russian Federal Tax Service (FTS) has updated its list of jurisdictions for automatic exchange of country-by-country (CbC) reports, effective 31 December 2024. The revised list comprises 45 states and 10 territories, compared to the previous
Read More