Russia Clarifies that Foreign Tax Credit not Available for Corporate Tax Withheld due to Misapplication of the Tax Treaty with Kazakhstan

The Russian Ministry of Finance recently issued Guidance Letter 03-08-05/45365, which clarifies whether a Russian taxpayer is eligible for a foreign tax credit for corporate tax withheld in Kazakhstan despite not having a permanent establishment in the country.

According to the letter, although Russia provides a tax credit under domestic law for foreign tax paid, for Kazakh-source income, the provisions of the Kazakhstan-Russia tax treaty apply. In the treaty's provisions for double taxatio…