Tax Treaty Case Law around the Globe 2021

S. 150I. Introduction

During the 2016–2020 period, disputes concerning beneficial owner and thin capitalization undoubtedly remained among the main categories of tax treaty disputes in the Russian Commercial Courts. However, some changes were in this practice in 2020.

Firstly, some changes took place in practice on the “beneficial owner” concept, and they were connected with the transformation of the regulatory framework. Indeed, almost all DTCs of Russia include beneficial owner (BO) clauses in Article 10 (dividends), Article 11 (interest), and Article 12 (royalties). The first set of judicial disputes on beneficial ownership in the national jurisdiction appeared in 2014–2016 as a result of the direct application of DTCs in the context of their interpretation in the light of the OECD/UN Commentaries. However, in 2015, the Russian legislator introduced a number of provisions into the RF Tax Code (in particular, Articles 7 and 312) which implemented the rule on “person with the actual right in regard to the income”. Undoubtedly, the legislator considered this provision as a kind of clarification and repetition at the domestic level of the international “beneficial owner” concept but, in fac...