Getting money out of Russia is a structuring choice — dividends at 15%, royalties and fees at 20%, or alternatives. Which mix lowers your combined cost, and which survives the FTS rather than inviting a challenge, is the question.
Dividends, royalties, management fees, interest and recharges each move value at a different rate — the mix is the lever.
Each route has to be genuine and defensible — a fee with no service or interest that fails thin-cap gets reclassified, turning a saving into an assessment.
Getting money out of a Russian subsidiary to a foreign parent is one of the most practical questions for any international group with a Russian operation. The route matters: dividends, royalties and management fees are all legitimate, but each carries a different withholding tax rate, different documentation requirements, different transfer pricing exposure, and different treatment under double tax treaties. This guide sets out the comparison for 2026.
The 20% withholding rate on royalties and management fees applies to non-resident foreign companies receiving these payments from Russian sources under domestic rules (ст.309 НК РФ). Double tax treaties often reduce these rates — where they remain in force.
Dividends remain the most straightforward and legally certain route for profit extraction, despite paying no CIT deduction benefit:
Rate: 15% WHT on dividends paid to non-resident corporate shareholders. The 0% participation exemption (ст.284 п.3 НК) is available for Russian-to-Russian corporate dividends; it does not apply to outbound payments to foreign entities.
Basis: dividends can only be declared from distributable RAS profit — Russian accounting profit, not IFRS. Groups with IFRS holding structures sometimes discover that the Russian entity has no distributable profit under RAS despite IFRS profitability, or vice versa.
Documentation: shareholder resolution, calculation of distributable profit, payment instruction. WHT is withheld and remitted by the Russian payer.
Currency: dividends to foreign shareholders require currency control compliance — payment through authorised Russian banks, with documentary confirmation of the grounds for the transfer.
Frequency: can be declared quarterly, semi-annually or annually. More frequent declarations are sometimes used for cash management, but each requires a shareholder resolution confirming sufficient profit.
Where a double tax treaty is in force and the recipient is the beneficial owner of the income, reduced rates apply:
Pick your situation — we'll tell you where you stand:
Royalties paid to a foreign IP owner reduce the Russian entity's CIT base (deductible as an expense), creating a double benefit compared to dividends — lower net cost, plus CIT saving. But the trade-off is higher WHT (20% domestic) and significant transfer pricing and anti-avoidance scrutiny:
IP substance requirement: Russian anti-avoidance rules (ст.54.1 НК) disallow deductions for payments to entities that do not perform real functions in relation to the IP — a foreign holding that merely owns registered rights without development activity is vulnerable.
TP documentation: royalty rates between related parties must be set at arm's length and documented. FTS increasingly requests TP studies for royalty payments, particularly above RUB 60M/year.
Treaty reduction: where an active treaty applies, royalties may be reduced to 10% (UAE, China) or lower. Beneficial ownership certificate (TRC or equivalent) required.
Deduction limit: thin capitalisation rules do not directly apply to royalties (unlike interest), but general expense reasonableness tests do — the rate must be commercially justifiable.
Management fees and intragroup service charges are deductible if real services are rendered at arm's length rates. The practical challenge is documentation:
What FTS looks for: a services agreement with specific scope, evidence that the services were actually performed (reports, emails, timesheets), and a rate that reflects market pricing for those services. Generic "management support" fees without substance are routinely challenged.
20% WHT: applies to the gross fee under domestic rules. Under the new Russia-UAE treaty, service payments from a Russian company to a related UAE resident are now exempt from this WHT — a meaningful change for UAE-Russia group structures.
VAT position: if the foreign entity has a place of supply in Russia, VAT at 22% may apply; if the place of supply is outside Russia, the Russian company may still be the tax agent for VAT purposes depending on the service type. Specific advice needed.
Whether claiming a reduced treaty rate on dividends, royalties or management fees, Russian WHT rules require the foreign recipient to be the genuine beneficial owner of the income — not a conduit for onward payment to a third-country entity. Where the FTS establishes a conduit structure, it will look through to the ultimate recipient and apply the rate applicable to that jurisdiction, which may be higher than the treaty rate claimed.
For regular profit extraction with minimal documentation risk: dividends at 15% (or 10% under applicable treaty) remain the simplest and most auditable route
For IP-holding groups with genuine IP development activity: royalties can be efficient but require robust TP documentation and substance
For genuine service providers (shared service centres, management companies with real functions): management fees with full documentation at market rates
UAE structures from 2026: the combination of 10% treaty dividend rate, 0% WHT on service fees to related UAE parties, and UAE's 9% CIT creates the most favourable framework available to Russia-operating businesses without a suspended treaty
There's no single answer — dividends are 15%, royalties and fees 20%, and the right mix depends on your structure and what's defensible. Modelling the combination against your situation is what lowers the real combined rate below any single route.
They can, if the payments lack substance — a management fee with no real service, or a royalty without a genuine licence, gets reclassified. Each route has to survive transfer-pricing and beneficial-ownership scrutiny, which is what separates a saving from an assessment.
By matching the route to a genuine commercial reality and documenting it — a real service behind a fee, a real licence behind a royalty. The defensible mix is what gets profit out without inviting a challenge.
This compares the routes for getting money out — dividends at 15%, royalties and fees at 20%, and the alternatives. Your question is which mix actually lowers your combined cost, and which will survive the FTS rather than invite a challenge.
Profit to move out? The route materially changes the cost — worth modelling before the payment, not after.
Practical support for international business in Russia.