The roles of the domestic rule «the person who has the actual right to income» in international tax relations

Abstract

The rule «the person who has the actual right to income» from Article 7 of the Tax Code of the Russian Federation is not a replica of the treaty rule «beneficial owner» from Articles 10–12 of the MC OECD. For a number of reasons, it is unjustified to use the rule from Article 7 to interpret the term «the person who has the actual right to income» from tax treaties with Russian participation. However, in relationships governed by tax treaties, the rule from Article 7 has the potential to act as a domestic general anti-avoidance rule.