Russia Reviews Eurobond Tax Rules as Claims Raise Concerns

Russia’s Finance Ministry is holding talks with issuers of foreign debt after the tax authorities sought a levy from some Eurobond coupon payments, Deputy Minister Sergei Shatalov said.

Coupon payments made to foreign debt holders through offshore special purpose vehicles, known as SPVs, are taxable under the current law, although the rules haven’t often been enforced, Shatalov said today by phone. Applying a 20 percent tax would add “certain risks” and make borrowing more expensive, he said.