Foreign trade news
and changes in legislation25.03.2013
The term «fixed base» giving consideration to the rules of Agreement between Russia and Germany for the Avoidance of Double Taxation
Letter of Department for Tax and Customs and Tariff Policy within Ministry of Finance of the Russian Federation dated 21 December 2012 No. 03-08-05 On determination of the term Fixed Base giving consideration to the rules of Agreement for the Avoidance of Double Taxation between Russia and Germany with respect to Income and Property
The Department for Tax and Customs and Tariff Policy has considered the inquiry concerning determination of the term “fixed base” giving consideration to the rules of Agreement between the Russian Federation and Federative Republic of Germany for the Avoidance of Double Taxation with respect to Taxes on Income and on Property (hereinafter referred to as “Agreement”) and informs as follows.
In accordance with article 14 “Income from independent personal services” of Agreement, the income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character may be taxable in the other Contracting State only if that person has a fixed base therein for the purpose of performing his activities. In this respect, there may be taxable only income which may be related to that fixed base.
Pursuant to the commentaries to the OECD Model Convention with respect to Taxes on Income and Capital the contents of the term “fixed base” of article “Income from independent personal services” is based on the principals governing the taxation of profits of a permanent establishment. It is also specified that a connection to a specific office (premises) shall not be substantial when determining the permanency criteria as the existence in the other state of a center of activities of uninterrupted or permanent character is fundamental.
© Translated from Russian by V. Slavinskiy | 
