Russian Federation tax deducted from dividends at the agreement
rate of 10 per cent qualifies for credit as a direct tax (see
INTM164010(c)). This reduced rate does not apply if the dividends
are effectively connected (see ITM153110 fifth sub-paragraph) with
a business carried on through a permanent establishment or fixed
base which the recipient has in the Russian Federation.
A United Kingdom company controlling, directly or
indirectly, at least 10 per cent of the voting power of the Russian
Federation company paying the dividend is entitled, under Article
22(1)(b), to credit for underlying tax (see INTM164010(d)).
