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Rosneft exempted from taxes
Rosneft will not pay taxes on interest from a prepayment received from the Chinese National Petroleum Corporation (CNPC) for the delivery of Russian oil to China, as stipulated in the recently signed intergovernmental agreement between Russia and China.
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Strategic agreements are always accompanied by a large number of benefits and concessions, such as a simplified customs regime, says Anastasia Vasilenko, a lawyer at ART DE LEX law firm. According to Article 7 of the Tax Code, tax exemption for any income is legitimate if stipulated by an international agreement. The Russian Government is permitted to establish such tax concessions when signing super national agreements, such as those on avoiding double taxation, says Ms Vasilenko.
According to Ms Vasilenko, the Chinese party will not pay a profit tax on the interest received for the actual crediting of the deliveries. The Russian budget most likely will not be able to claim an increase in the profit tax base of Rosneft, given that this interest will be considered an expense for the reduced tax base.
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Strategic agreements are always accompanied by a large number of benefits and concessions, such as a simplified customs regime, says Anastasia Vasilenko, a lawyer at ART DE LEX law firm. According to Article 7 of the Tax Code, tax exemption for any income is legitimate if stipulated by an international agreement. The Russian Government is permitted to establish such tax concessions when signing super national agreements, such as those on avoiding double taxation, says Ms Vasilenko.
According to Ms Vasilenko, the Chinese party will not pay a profit tax on the interest received for the actual crediting of the deliveries. The Russian budget most likely will not be able to claim an increase in the profit tax base of Rosneft, given that this interest will be considered an expense for the reduced tax base.