The Guidance Letter No. 03-12-11/2/11449, published by the Russian Ministry of Finance (MoF) on 12 February, 2024, addresses the tax exemption applicable to profits of Controlled Foreign Companies (CFCs) situated in jurisdictions with which Russia has a tax treaty.
The exemption is typically in effect unless a jurisdiction lacks provisions for sharing information with Russia.
Concerning this matter, the Ministry was queried about the application of the exemption when a tax treaty with a specific jurisdiction has been suspended.
The letter highlights that Decree No. 585 has temporarily halted specific provisions within tax treaties, without nullifying the treaties entirely. Therefore, the condition of the treaty may still be deemed fulfilled for the purpose of the CFC profit exemption, provided that the relevant jurisdiction is not listed among those lacking adequate tax information exchange with Russia.
