Separate Accounting If Non-VATable Transactions Are Less Than 5%: Pepeliaev Group reports that the Presidium of the Supreme Russian Arbitration Court has published its Resolution No. 2676/12, dated 21 June 2012, which permits all taxpayers, irrespective of their economic activities, not to account separately for input VAT if the share of non-VATable operations completed before October 2011 is insignificant (para. 9, article 170(4) of the Russian Tax Code of Russia).

Clarifying how guarantee-related disputes should be resolved Pepeliaev Group advises that on 12 July 2012 a Resolution of the Plenum of the Russian Supreme Arbitration Court (the “SAC”) was published. It clarifies how provisions concerning a guarantee should be applied when cases are considered by courts, as well as when bankruptcy cases are considered.

In Leningrad Region, new tax benefits have been introduced for investors

Transfer Pricing: Notifications of Controlled Transactions

Law firm Pepeliaev Group reports that the Federal Tax Service of the Russian Federation has approved the documents which taxpayers will need in order to submit notifications of transactions that are subject to special control under the transfer pricing laws.

In Leningrad Region, new tax benefits have been introduced for investors Pepeliaev Group advises that the Leningrad Region legislation regarding tax benefits for investors is to undergo significant amendment.

The Russian Supreme Arbitration Court has supported the computation method for determining profit tax when the documents of the taxpayer’s counterparty are not accurate Pepeliaev Group advises that Resolution No. 2341/12 of the Supreme Arbitration Court dated 3 July 2012 has been handed down.  It clarifies the application of article 31(1)(7) of the Russian Tax Code for the calculation of profit tax with ‘problematical suppliers’.

Public service connected with licensing pharmaceutical activity Pepeliaev Group advises that on 6 February 2012 the Russian Ministry of Public Health and Social Development published a draft order on its website by which it approved the Administrative Regulations of the Federal Supervisor for Public Health with regard to provision of a public service connected with licensing pharmaceutical activity.

Legislation on international taxation amended Pepeliaev Group advises that Federal Law No. 97-FZ dated 29 June 2012, which makes various amendments to tax and banking legislation, has been officially published.

New stance of the Russian Supreme State Commercial (‘Arbitration’) Court on the recovery of court costs Pepeliaev Group advises that in its Resolution No. 16067 dated 15 March 2012, the Presidium of the Russian Supreme Arbitration Court (SAC) confirmed that it was lawful to recover from the tax authorities expenses of almost RUB 3 million on the taxpayer’s representatives involved in its defence.

Roszdravnadzor has approved Administrative Regulation on pre-clinical and clinical trials conduct monitoring

Pepeliaev Group advises that the Ministry of Healthcare and Social Development of RF issued Order No. 1091n dated 09/29/2011 “On adoption of Federal Service for Surveillance in Healthcare and Social Development (Roszdravnadzor) Administrative Regulation regarding the performance of state controlling function over medicines pre-clinical trials and medications for medical usage clinical trials”, which came into effect on the 1st of April, 2012.

Transfer pricing: a new development in determining the aggregate threshold of controlled transactions Pepeliaev Group advises that the Russian Finance Ministry, in its Letter No.  03-01-03/18-31 dated 14 March 2012, clarified the procedure for determining amounts of income under so-called ‘fanned out’ transactions that a taxpayer undertakes with related parties.

Israeli court recognises a decision of its Russian colleagues

In February 2009, the Moscow City State Commercial (‘Arbitration’) Court handed down a decision allowing russian company to recover debt from the Israeli-registered company (the “Defendant”) under a supply contract. The court also awarded interest of more than EUR 5 million on the amount due.