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 re-domiciled as an international company.
Taxpayers that have incurred losses, as calculated under Chapter 25 of the Tax Code in previous tax periods, may reduce the current tax period’s corporate income tax base by the full or partial amount of those losses.
The first tax period for international companies starts from the date a foreign company is registered. Losses incurred prior to the registration of a CFC as an international company do not meet the criteria under Article 283 for loss carry-forward and thus cannot be deducted for corporate income tax purposes.
However, Losses incurred by a CFC’s standalone division through its activities in Russia before registration as an international company may be deductible, provided these losses were calculated per Chapter 25’s rules and meet the criteria of Article 283, as long as they have not been previously deducted under the provisions of Chapters 3.4, 23, and 25 of the Tax Code.
