Analytics and brochures

Overview of Tax Events for October 2018 The Finance Ministry has published on its website the “Principal areas of focus for the public finances, tax, customs and tariffs policy in 2019-2021”.

A new Circular Letter of the Central Bank of Cyprus on shell companies

Legal firm Pepeliaev Group advises that the Central Bank of Cyprus has issued an additional circular letter regarding shell companies, containing more favourable explanations as to when a company is classified as a shell company.

A tax agent may recover an amount of tax it paid from its own property on behalf of a foreign person by using the institution of unjust enrichment The Commercial Court, in the case of the Organising Committee of the 2014 Olympic and Paralympic Winter Games in Sochi, has recognised as lawful the application of the civil law mechanism for recovering from a foreign person an amount of unjust enrichment in the form of tax that a tax agent has paid on behalf of the foreign person, together with interest for using the other party’s money.

The Russian Supreme Court on a tax benefit for movable property

Despite the literal wording of article 381(25) of the Russian Tax Code, movable property that was acquired from a related party can be exempted from taxation in certain cases, according to the Russian Supreme Court.

The Russian Supreme Court on withholding tax at source when services of a foreign company are paid for According to the Russian Supreme Court payments under cross-border agreements for services (work) are treated as passive income if no operations have actually been performed.  

Overview of Tax Events for September 2018 The Russian Ministry of Economic Development has prepared draft amendments to the Russian Civil Code which are to determine what property is treated as movable for tax purposes.

The status of an international company has been enshrined in Russian law

Pepeliaev Group advises that Federal Law “On international companies” (the “Law”) came into full force on 3 August 2018. The Law establishes a regime for foreign companies allowing them to change their personal law and obtain the status of international companies.

Pepeliaev Group has contributed to Taxand publication: GLOBAL GUIDE TO M&A TAX

Overview of Tax Events for August 2018

Russia is preparing to ratify the multilateral Convention dated 24 November 2016 which is designed to ensure the coordinated implementation of the BEPS Plan - a draft Federal Law has been prepared.

A time limit has been established for filing a motion for reconsideration of a specific case with the Russian Supreme Court

Pepeliaev Group informs you that a time limit has been set for filing a motion with the Chief Justice or a Deputy Chief Justice of the Russian Supreme Court in the case of a refusal to refer a cassation appeal for consideration by the Judicial Chamber of the Russian Supreme Court. This time limit may not exceed two months, which is the statutory timeframe for filing a cassation appeal.

Overview of Tax Events for July 2018 The State Duma’s spring session resulted in a number of significant tax laws being adopted, some of which the Russian President has already signed.

Decision of the European Court of justice on the prevention of abuse of international tax treaties

Pepeliaev Group advises that a decision in favour of a taxpayer was handed down by the European Court of Justice. This may be of significance for the development in Russia of the concept of a beneficial owner.

Liability for the violation of the rules for waste treatment is planned to become more stringent

The Ministry of Natural Resources and Environment of the Russian Federation has prepared a draft law “On amending the Russian Code of Administrative Offences” which proposes to supplement articles 8.2, 8.4 and 8.6 with new articles and to introduce new heads of administrative offences (articles 8.2.1, 8.2.2, 8.2.3, 8.5.1 and 8.41.1) in the field of treating production and consumption waste.

Explanations of the Russian Supreme Court regarding transportation by motor vehicles and freight forwarding activities Pepeliaev Group advises that the Plenum of the Russian Supreme Court (the “Supreme Court”) has provided explanations on a number of matters which arise in the practice of the application of legislation concerning contracts for transportation by motor vehicles of cargo, passengers, and luggage, and freight forwarding contracts.

New explanations of the plenum of Russian supreme court with respect to major transactions and interested-party transactions

Resolution No. 27 of the Plenum of the Russian Supreme Court dated 26 June 2018 was published with explanations of the rules for challenging major transactions and interested-party transactions. The previous explanations (Resolution No. 28 of the Plenum of the Russian Supreme Court dated 16 May 2014) have been updated, and a number of new significant provisions have been added.

Tax authorities are imposing stricter controls over the justifiability of expenses on intragroup services Pepeliaev Group advises that a risk exists that the Federal Tax Service's Inter-regional Inspectorate No. 1 for major taxpayers may file claims with respect to expenses on intragroup services incurred by an entity.

Overview of Tax Events for June 2018

On 16 June Resolution No. 693 of the Russian Government was signed ‘On the implementation of the international automatic exchange of financial information with competent authorities of foreign states (territories)’. 

Joining the federal agricultural industry agreement for 2018-2020

At federal level, the industry agreement has been adopted which sets additional obligations and automatically extends to companies in Russia's agricultural industry. To refuse to join the agreement, a well-grounded written refusal should be filed with the Russian Ministry of Labour and Social Protection (the 'Ministry of Labour') by 14 July 2018. 

Important changes to the migration registration process for foreign nationals in Russia On 27 June 2018, the Russian President signed Federal Law No. 163-FZ On amending the Federal Law ‘On registering foreign nationals and stateless persons with migration authorities in Russia’.

Explanations of the Russian Federal Tax Service regarding the application of the concept of a beneficial owner of income Pepeliaev Group advises that the Russian Federal Tax Service (the ‘Federal Tax Service’) has disseminated among tax authorities written explanations regarding the issues of using the concept of ‘a person that enjoys the beneficial ownership of income’ (a beneficial owner of income) when international double taxation treaties are applied.