The Russian Ministry of Finance (MoF) allotted Letter No. 03-08-05/1229,on 17 January 2014, clarifying whether income received by a US partnership may be subject to tax according to the Russia–United States Income and Capital Tax Treaty (1992). The Ministry of Finance mentioned to article 4 of the treaty, where it is provided that, in the case of income derived by a partnership, trust, or estate, residence is determined in accordance with the residence of the person liable to tax with respect to such income.
Under US law, the partnership does not qualify as a separate legal entity and is not subject to taxation. Accordingly, its tax liabilities are borne by the partners. Thus, certificates of tax residence should be issued for the partners in order for the treaty to apply.
Hence, the Ministry of Finance resolved that income received by a US partnership may be taxed according to the treaty if the members of the partnership present documents (i.e., certificates of tax residence) to confirm their tax residence in the US.
