Overview of tax events for April 2017

REGULATORY DEVELOPMENTS

A Resolution of the Russian Government has been signed extending the list of technological equipment for which no comparable equipment is produced in Russia and the import of which is not subject to VAT.

The Russian Ministry of Finance has approved the procedure for third parties to pay tax for taxpayers.

The Japanese Government has agreed with Russia the signing of a new double taxation convention.

The Russian Government has approved a draft law for levying, by way of an experiment, a resort fee in Crimea and in the Altai, Krasnodar and Stavropol Territories.

Members of the State Duma have drafted a law allowing for elements of an offshore zone to be introduced in Crimea and Sevastopol. The main idea is to create an opportunity to establish trusts.

The Russian Government is proposing to introduce a general investment benefit for all companies investing in modernisation. Such companies may expect their income tax to go down by 5%.

In 2017, the Russian Ministry of Finance will devise the framework of a new tax system and a code of non-tax payments which will systematise the rules for introducing and collecting such payments. To assess tax benefits, the Ministry of Finance is planning to introduce the concept of tax expenses.

Jackets, coats, blouses, footwear, cosmetics, photo cameras, bed clothes, and wheels - the Russian Ministry of Industry and Trade suggests marking all these items as furs.

PRACTICE

The Federal Tax Service has issued Letter No. ED-5-9/547@ dated 23 March 2017 clarifying how inspectors should audit transactions involving sham entities and how they should prove that the schemes used are illegal

In correspondence between them, the RUSSIA Association of Regional Banks and the Legal Department of the Russian Central Bank have addressed the problem of Russian banks cooperating with their foreign counterparts.
The Russian Ministry of Finance demands that foreign banks be registered with a tax authority at the location where their Russian counterpart bank was registered (the one in which foreign banks open accounts). Difficulties have arisen this year owing to the reform of the procedure for registering Moscow banks with the tax authorities.

The first hundred companies which are paying VAT when selling virtual goods in Russia have registered with the Russian Federal Tax Service.

The Russian Ministry of Industry and Trade advises that the list of real estate items in relation to which the tax base was determined as their cadastral value has accumulated a number of errors and will be checked.

The Russian Constitutional Court has ruled that it is lawful to collect, through legal proceedings, tax arrears from individuals based on civil law rather than the Russian Tax Code.

The tax authorities have dropped their claims against Deutsche Bank in relation to the sale and purchase of currency. The bank had performed these transactions from 2013 to 2014 with an affiliated entity (a subdivision of Deutsche Bank in London). The Russian subsidiary of the major German bank is no longer under the threat of paying to the state budget over RUB 10 billion of extra tax charged.