Russian Ministry of Finance's Letter No. 03-08-05/36373 dated 29 May 2018 regarding the Double Taxation Convention with Spain

27 June 2018
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Attn.: NSD's Clients

Please be advised as follows:

1. A new Letter issued by the Russian Ministry of Finance (No. 03-08-05/36373 dated 29 May 2018), which clarifies the mode of application of the Double Taxation Convention between the Government of the Russian Federation and the Government of the Kingdom of Spain in connection with dividend income payment, has been posted on NSD's web site ('Tax Management' section). According to the Letter, the reduced tax rate of 10% under paragraph 2(b) of Article 10 of the Convention may only be applied if certain conditions are met, namely if the dividends are exempt from tax in the Kingdom of Spain. To enable NSD to properly exercise withholding agent's functions in accordance with the clarifications given (see the penultimate paragraph of the Letter), please note that, if the summary Tax Disclosure statement contains a reference to the application of the reduced tax rate of 10%, it is recommended that, along with the Tax Disclosure statement, NSD be provided with a COPY of the document issued by the competent authority of the Kingdom of Spain, certifying that the dividends are exempt from tax in SPAIN. In the event of any tax audit, the taxpayer will be required to provide the original of that document along with its translation duly attested.

2. The relevant amendments have been made to the List of Tax Rates and References under Double Taxation Treaties of the Russian Federation. In particular, the following lines have been added to the List:

Code of country Country Double Taxation Treaty Type of income Tax rate under agreements Special privileges Applicable tax rate
Article Point Subsection or paragraph
1 2 3 4 5 6 7 8 9
ES** Spain 10 2 b.a1 Dividends 10 * 15
ES** Spain 10 2 b.a2 Dividends 10   10

In case of any question related to this communication, you may contact your account managers at +7 495 956-27-90 or +7 495 956-27-91.

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