If your company pays services to foreign carriers, there is a critical tax issue that may result in significant financial exposure.
This relates to the “withholding tax at source” (Articles 310(1)–(2) of the Russian Tax Code).
What does this mean in simple terms?
If a Russian company (for example, a freight forwarder) pays a foreign company for international transportation services (e.g., a Turkish shipping line), it automatically becomes a tax agent.
This means the Russian company is obliged to withhold tax from the foreign contractor’s income and transfer it to the Russian budget. In practice, you do not pay the full invoice amount — the payment is reduced by the tax amount.
This rule applies, for example, when a Turkish carrier performs maritime transportation from a Russian port to a Turkish port (or vice versa). Income from such services is subject to taxation in Russia, and the Russian freight forwarder must withhold and remit the tax when paying the carrier.
This is not just theory
Court practice is becoming increasingly strict on this issue. Recently, companies AgroLogistics and Fleet-Service attempted to challenge this approach, but the courts sided with the tax authorities (cases No. A45-3659/2025 and A32-6665/2025).
In these cases, a 5% tax rate was applied under the Double Taxation Treaty (DTT).
Key legal points
Income from international transportation is subject to taxation under subparagraph 8, paragraph 1 and paragraph 1.1 of Article 309 of the Tax Code of the Russian Federation
The fact that a company operates in Russia, including having a representative office, does not affect taxation in this case
Double Taxation Treaties (DTTs) do not automatically exempt such income from taxation in Russia
A DTT may provide for a reduced tax rate or limitation rules (for example, the Russia–Turkey DTT provides for a 50% reduction)
Corporate income tax rate: 10% (subparagraph 2, paragraph 2 of Article 284 of the Tax Code of the Russian Federation)
Takeaway
Companies engaged in international logistics should carefully review contracts with foreign carriers. Failure to apply withholding tax rules may result in significant additional tax charges and penalties.