Russia Issues Guidance on the Recognition of Interest Expense and Related Foreign Exchange Differences

The Russian Ministry of Finance recently published Guidance Letter No. 03-03-06/1/4857, which clarifies that tax treatment of interest expense and foreign exchange difference for controlled debt in a foreign currency.

According to the letter, if a loan agreement or similar agreement resulting in a debt obligation exceeds one year, the interest expense must be recognized and included as an expense for tax purposes at the end of each month of the period, without regard to the payment dates st…