In order to implement the provisions of international treaties of the Russian Federation, all foreign organizations that own bonds of Transneft and that have an actual right to receive coupon yield shall provide Transneft with a confirmation of a permanent place of business of this foreign organization in a country with which the Russian Federation has an international treaty governing taxation issues. The above confirmation must be certified by a competent authority of the corresponding foreign state. If this confirmation is in a foreign language, a translation into Russian must also be provided.
In addition, all foreign organizations that receive the coupon yield on the bonds of Transneft must confirm their actual right to receive the specified yield.
Pursuant to the applicable provisions and for the purposes of the RF Tax Code and application of international treaties of the Russian Federation on taxation, an entity that has an actual right to the income (yield) shall be an entity that, by reason of direct and (or) indirect participation in or control over the organization or through other circumstances, has the right to an independent use and (or) disposal of the income (yield) or an entity on whose behalf another entity is entitled to dispose of such income (yield).
When paying the yield to bond holders that are foreign organizations which have not provided the above-mentioned confirmation until the payment of the income, a tax at a rate of 20 pct will be withheld.
In the future, these bond holders can exercise their right to apply for a reduced taxation rate by submitting an application for refund of the overpaid tax amounts to the tax authority according to the procedure established in Article 312 of the Tax Code of the Russian Federation.