Article 269.2 of the Russian Tax Code provides for thin-capitalization rules that apply only to loans received by a Russian company from a foreign entity that directly or indirectly owns more than 20% of its share capital. The maximum deduction on such loans is calculated based on a debt-to-equity ratio of 3:1 (12.5:1 for banks). Any interest paid on debt exceeding this ratio is reclassified as a dividend, and therefore:
June 30 2005
