In 2022, new trends shaped tax litigations over distributions to foreign persons, to name but a few:
On top of that, mutual agreement procedures involving Russia nearly came to a halt.
Therefore, even if a taxpayer believes that the Russian taxation is inconsistent with the objectives and principles of a tax treaty, the dispute would be hard to solve at the transnational level.
We recommend thoroughly assessing the potential risks and their impact when planning any cross-border transactions, even with non-hostile states.
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- more types of outbound payments were treated as passive income
- withholding tax was increasingly charged at a 20-percent rate applicable to Other Income
- payments for services that were not effectively rendered were treated as illegitimate foreign currency transaction
- tax treaty benefits were disallowed on the mere account of ‘tax abuse’.
On top of that, mutual agreement procedures involving Russia nearly came to a halt.
Therefore, even if a taxpayer believes that the Russian taxation is inconsistent with the objectives and principles of a tax treaty, the dispute would be hard to solve at the transnational level.
We recommend thoroughly assessing the potential risks and their impact when planning any cross-border transactions, even with non-hostile states.
Download