The Russian Ministry of Finance has published Letter No. 03-08-05/43512 of 25 May 2020, which clarifies the taxation of payments made to a non-resident legal entity with a permanent establishment (PE) in Russia. The letter notes that in accordance with the Russian Tax Code, non-resident legal entities operating in Russia through a PE and (or) receiving income from Russian sources are recognized as taxpayers in Russia.

Where income is paid to a non-resident legal entity subject to tax in Russia, the tax agent (payer) is required to withhold tax in all cases, except when the tax agent is notified by the recipient that the income is attributed to the PE of the recipient and the tax agent has at its disposal a notarized copy of the recipient's certificate of registration with the tax authorities, issued no earlier than in the previous tax period. As such, where these two conditions are met, the tax agent is required to not calculate and withhold tax on payments made to a non-resident that are attributed to the non-resident's PE in Russia.