In a recent decree, the Supreme Arbitration Court of the Russian Federation (the “SAC”) indicated that a foreign company’s registration documents are not sufficient to prove that the company is actually permanently resident where it is registered. Proof of residence is required to qualify for the tax benefits provided in double tax treaties.
The SAC also concluded that documents issued by the ministries of finance of the respective countries will be treated as sufficient evidence of a company’s being permanently resident in a specific area.
Accordingly, foreign companies or tax agents will be able to take advantage of the tax benefits provided by double tax treaties only if they provide documents proving the permanent residence of the foreign company. It should be noted that the tax authorities have refused all along to treat registration documents as sufficient proof of tax residency.
[Decree of the Presidium of the Supreme Arbitration Court of the Russian Federation No. 9999/10, on case No. А56-18352/2009, dated 28 December 2010]