AGREEMENT BETWEEN THE GOVERNMENT OF THE RUSSIAN FEDERATION AND GOVERNMENT OF THE REPUBLIC OF FINLAND

of May 4, 1996

About avoidance of double taxation concerning taxes on the income

Government of the Russian Federation and Government of the Republic of Finland,

wishing to sign the Agreement on avoidance of double taxation concerning taxes on the income,

agreed as follows:

Article 1. Persons to whom the Agreement is applied

This agreement is applied to persons who are residents of one or both Contracting States.

Article 2. Taxes to which the Agreement extends

1. This agreement extends to the taxes on the income levied in the Contracting State irrespective of what name of authority they are levied or method of their collection.

2. All taxes levied from total of income or from separate elements of the income including the income from alienation of personal or real estate belong to taxes on the income.

3. The existing taxes to which this agreement is applied are the following taxes:

a) in Russia:

(i) income tax of the companies and organizations; and

(ii) the income tax from physical persons

(further the referred to as "Russian taxes");

b) in Finland:

(i) national income taxes;

(ii) corporate income tax;

(iii) municipal tax;

(iv) church rate;

(v) the tax on percent levied at source;

(vi) the tax on the income of nonresidents levied at source

(further the referred to as "Finnish taxes").

4. This agreement will be applied also to any to similar or in essence to similar taxes which will be imposed after signature date of this agreement in amendment or instead of the existing taxes. Competent authorities of Contracting States will notify each other on any essential changes in their relevant tax laws.

Article 3. General determinations

1. For the purposes of this agreement if other does not follow from context:

a) the term "Russia" when using in geographical sense means the territory of the Russian Federation - Russia, including its internal waters and the territorial sea, airspace over them, and also the continental shelf and exclusive economic zone where the Russian Federation - Russia has sovereign rights and performs jurisdiction according to the federal legislation and rules of international law; the terms "Russia" and "Russian Federation" are equivalent;

b) the term "Finland" means the Republic of Finland and when using in geographical sense means the territory of the Republic of Finland and any area adjacent to territorial waters of the Republic of Finland in which according to the Finnish legislation and rules of international law Finland can perform the rights on investigation and use of natural resources of seabed, its subsoil and the water area over it;

c) the terms "one Contracting State" and "other Contracting State" mean, depending on context, Russia or Finland;

d) the term "person" includes physical person, the company and any other consolidation of persons;

e) the term "company" means any corporate consolidation or any education which for the tax purposes is considered as corporate consolidation;

f) the term "international delivery" means any transportation performed by resident of one Contracting State, except as specified when it is transported only between Items in other Contracting State;

g) the term means "competent authority":

i) in Russia - the Ministry of Finance of the Russian Federation or the representative authorized by it;

ii) in Finland - the Ministry of Finance, his authorized representative or the body appointed by the Ministry of Finance as competent authority.

2. In case of application of this agreement by the Contracting State any term which is not determined in the Agreement has that significance which is attached to it by the legislation of this State concerning taxes to which this agreement extends if other does not follow from context.

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