The Russian State Duma Council accepted the decision on 17th February 2015 to incorporate a new draft of Law No. 724609-6 on the introduction of changes to Article 269, Part 2 of the Tax Code regarding the meaning of controlled debt. The draft law reports on thin capitalization rules which were deleted from the recent law amending Article 269.2 of the Russian Tax Code. The draft law text is similar to the version of Draft Law No. 675906-6 that was made for the first reading. As comparing with the first version, the main changes occurred in this version is the return condition that a Russian borrower has a foreign shareholder so as to remember a debt as being controlled. A controlled debt will be considered an outstanding debt of a Russian organization in respect of the following debt compulsions:
- To a foreign entity which is considered to be interconnected with the Russian organization if the foreign entity participates directly or indirectly in such Russian organization.
- To a Russian entity that is deemed to be related with the previous foreign organization.
- To the entity in respect of which such a foreign entity or its Russian interrelated entity directly acts as the guarantor or otherwise assumes to confirm the fulfillment of the debt compulsion.
Previously, the new draft law exempts the Russian organizations debt to third party Russian banks from the thin capitalization rules if certain terms are satisfied.
