Russian Federal Tax Service issued a clarification letter regarding taxation of dividends paid by a Russian company to a foreign company, the actual right to which belongs to individuals, whether Russian tax residents or non-residents (Letter No. BS-4-11 / 7571@ dated 01.06.2021).

In the said case, Russian paying company shall be recognized as a tax agent and shall withhold personal income tax. For individuals, being Russian tax residents, the rate shall be (i) 13% on the amounts within 5 million rubles and (ii) 650 thousand rubles and 15% on the amounts exceeding 5 million rubles.

Applicable withholding tax rate with respect to dividends the actual right to which belongs to individuals, being Russian tax non-residents, is defined based on relevant double tax treaty.

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