Tax dispute over applying the Russia–US double tax treaty and avoiding double taxation

The tax authority insisted on taxing gross income at 30%, refusing to take into account the cost of acquiring the apartments, which resulted in double taxation.

The tax authority insisted on the mandatory taxation of the non-resident taxpayer's gross income, arguing it was in principle impossible to account for the cost of acquiring the property and that the Russia–US tax treaty did not apply

We prepared an administrative claim, establishing the distinction between a “deduction” and “reducing income by expenses.”  We put forward the position that a non-resident has the right to reduce income by expenses under Art. 41 of the Tax Code. We applied Art. 23 of the Russia–US tax treaty (the income was received before Presidential Decree No. 585 of August 8, 2023) and the OECD Commentary (para. 12 to Art. 13).

Court representation is under way; an administrative claim has been filed against the tax authority.

The project protects the property interests not only of this particular client but of all non-resident taxpayers facing potential double taxation. Its value lies in the comprehensive assessment of the tax consequences, taking account of the suspension of international treaties.

Tax disputes involving non-residents; applying double tax treaties (in conditions of their partial suspension/termination); challenging the taxation of gross income in real-estate transactions.