11 November 2016 Russian arbitration court issues ruling on "beneficial owner" of income in favor of tax inspectorate The latest ruling on a dispute in which a Russian tax inspectorate used the concept of a "person who has an actual right to income" (Articles 7 and 312 of the Tax Code), otherwise known as the "beneficial owner" rules, came out at the beginning of November. As in another recent ruling, the Moscow Arbitration court (the court) ruled in favor of the inspectors. The court concurred with the tax inspectorate (the inspectorate) that the reduced rate of withholding tax could not be applied due to the fact that the Cypriot companies which received dividends from Russia were "conduit" companies, did not have an actual right to the dividend income, and could not, therefore, enjoy the benefits provided by the Russian-Cypriot tax treaty. Document ID: 2016-1931 |
