VATupdate

Russia Reduces Key Interest Rate to 7.5% Impacting Interest Penalties

The Russian Central Bank announced its decision to reduce the key rate from 8.0% to 7.5% on 16 September 2022. For tax purposes, the key rate is important in relation to the safe harbor rates for interest income and expense on controlled debt. For ruble-denominated loans, the standard safe harbor rates range from 75% to 125% of the key rate. However, the upper range has been temporarily increased to 180% for the period 1 January 2020 to 31 December 23, and for ruble-denominated loans between Russian parties, an increased range of 0% to 180% is temporarily provided for the same period. For loans denominated in other currencies, the safe harbor rate range is based on EURIBOR, SHIBOR, or LIBOR, depending on the currency, with more beneficial rate ranges temporarily provided for foreign currencies for the period 1 January 2020 to 31 December 2023.

Source Orbitax

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