The Finance Ministry (MoF) has published a Letter No. 52359 for describing the allocation of income and expenses to a Permanent Establishment (PE) in Russia of a non-resident company and it has issued on 17th October 2014. In accordance with article 246 of the tax code, a non-resident having a PE in Russia is counted as a taxpayer. Again, according to article 306 of the Tax Code, a PE includes a branch, representative office, division, bureau, agency, other structural subdivision, or any other place through which a non-resident often carries on business actions in Russia. The MoF also described that under article 307 of the Tax Code, a non-resident doing activities through a PE in Russia must determine the corporate income tax base considering the income derived from performing activities in Russia through the PE and the related expenses that are deductible under the Tax Code. Under article 252 of the Tax Code, expenses are treated as tax deductible, if such costs are economically justified, properly documented, and incurred with the view to obtain taxable income. Also, income allotted to the PE in Russia should be determined considering the functions performed, the assets used and the economic or commercial risks estimated by that PE.
Related Posts
Russia: Central Bank of Russia cuts key rate by 25 basis points
The Central Bank of Russia (CBR)’s Directors decided to cut the key rate by 25 basis points to 14.25% per annum on 19 June 2026. The CBR’s key interest rate is applied in calculating interest deductions and the interest on late payment of
Read MoreFinland formally ends tax treaty with Russia from July 26
Finland will formally suspend its income tax treaty with Russia effective 1 July 2026, aligning with Russia's August 2023 decision to suspend reciprocal application. Up until now, Finland maintained the treaty unilaterally despite the lack of mutual
Read MoreRussia: State Duma approves draft bill for regulation of digital assets
Russia’s State Duma, in the first reading, has approved a draft law designed to align the provisions of the Tax Code with separate legislation establishing a comprehensive framework for the regulation of the organisation and circulation of
Read MoreFinland: President approves suspension of Russia tax treaty implementation act
Finland’s President has signed the law suspending the implementing Act for the 1996 tax treaty with Russia on 29 May 2026, according to an update from the Finnish government. As previously reported, Finland had already notified Russia that the
Read MoreRussia gazettes various tax relief measures for SMEs
Russia has published the Federal Law No. 104-FZ of 25 April 2026 in the Official Gazette, which introduces several significant amendments to the Russian Federation Tax Code, particularly regarding Value Added Tax (VAT) and the Simplified Tax Regime
Read MoreRussia reminds taxpayers of controlled transaction notification obligations
Russia’s Federal Tax Service (FTS) has reminded taxpayers that notifications of controlled transactions for 2025 must be submitted no later than 20 May 2026. Under paragraph 8 of Article 105.15 of the Tax Code of the Russian Federation,
Read More