Tax law and tax disputes

The third stage of the "Offshore amnestey": the requirements for redomiciliation of foreign companies to Russia Pepeliaev Group advises that the State Duma has adopted a set of laws extending until 29 February 2020 the period of the voluntary reporting of individual types of activity and accounts in foreign banks.

The Multilateral Tax Convention has been ratified Pepeliaev Group advises that the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”) has been ratified.

The third stage of the “Offshore amnesty” will require that foreign companies be redomiciled to Russia and funds be repatriated from foreign accounts The Russian Government has put before the State Duma draft laws prolonging the period when persons can voluntarily report certain types of assets, as well as accounts in foreign banks (the so-called “offshore amnesty”) until 29 February 2020. Yet, the application of the new (third) stage of voluntary reporting will be subject to rather stringent conditions.

Court practice regarding advertising and markerting expenses within intra-group relations

Pepeliaev Group advises you about the court practice regarding advertising and marketing expenses which a taxpayer that is a manufacturer of goods has incurred within intra-group relations. The position of the court regarding this case may apply to other similar disputes.

Electronic services

Starting from 1 January 2019, the rule of Law No. 244-FZ dated 3 July 2016 came into effect. Under this rule, foreign companies providing electronic services to individuals and legal entities in Russia will themselves have to calculate and pay VAT on the value of the services provided.

A mutual agreement procedure in the context of double tax treaties

Pepeliaev Group advises that the Russian Ministry of Finance has published its Guidelines on a mutual agreement procedure.

May foreign holding companies that serve the interests of one group of persons not be beneficial owners of income? Law firm Pepeliaev Group advises that the court has used in practice the conclusions of Letter No. SA-4-9/8285 of the Russian Federal Tax Service dated 28 April 2018 regarding the application of international tax treaties by foreign holding companies that serve the interests of a single group of persons.

Transformation of environmental charges

Pepeliaev Group advises that a draft law has been made available for public discussion. This draft law provides for the charge for a negative environmental impact to be replaced with an environmental tax, and for environmental and recycling fees to be replaced with a recycling fee, with the new payments being introduced into the Russian Tax Code.

Сlarifying the rules for calculating taxes on income from capital and other amendments to the Tax Code to come into force from 2019 Pepeliaev Group advises that amendments have been made to the Russian Tax Code that clarify the rules for calculating taxes on income from capital, and that other tax changes have been made.

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.