On 20 December 2006, the Ministry of Finance of the Russian Federation issued a private ruling in the form of a letter (No. 03-08-05) dealing with the application of thin capitalization rules in the context of tax treaties. According to this clarification, domestic thin capitalization rules also apply to the interest paid by a subsidiary resident in Russia to its parent company resident in the Netherlands. Domestic thin capitalization rules apply only to interest on loans provided by a non-resident corporate shareholder to its Russian subsidiary, subject to the condition that this non-resident holds, directly or indirectly, more than 20%...