Tax law and tax disputes

"Thin" capitalisation (under-capitalisation): new rules Pepeliaev Group advises that on 29 January 2016 the State Duma adopted a federal law  which significantly changes the rules for taxing interest on debt obligations to related parties and/or on debt obligations raised with such parties involved (the so-called "thin" capitalisation, or "under-capitalisation" rules). The law also clarifies many issues which may arise in connection with law enforcement practice where these rules are applied.

The Government has approved three new priority development areas (PDA) Pepeliaev Group advises that on 28 January 2016 the Russian Government adopted a resolution to establish first priority development areas (PDAs) in monotowns in Russia and a new priority development area in the Far East.

Special rules for conducting joint scheduled audits in relation to residents of priority development areas Pepeliaev Group advises that on 1 January 2016, special rules took effect for conducting joint scheduled audits in relation to residents of priority development areas in Russia.

Russia`s Federal Tax Service has a new blacklist Pepeliaev Group advises that a draft has appeared of a new blacklist of offshore jurisdictions. 

A draft law to improve VAT Pepeliaev Group advises that Russian Ministry of Finance has placed, for public consultation a draft law "On amending Chapter 21 of Part II of the Russian Tax Code (regarding the procedure for determining the tax base when an advance payment is received). 

New regulation of factoring transactions under foreign trade contracts Pepeliaev Group advises that a Federal Law has been enacted, enabling Russian banks and factoring companies to offer Russian clients financing services involving the assignment of receivables (factoring) under foreign trade contracts.

VAT charged when non-payment under a contract is insured: the position of the russian constitutional court Pepeliaev Group advises that Russian Constitutional Court has held that article 162 of the Russian Tax Code, which in fact establishes double VAT on insurance payouts that a supplier of goods (work, services) receives under a contract insuring default by the buyer, was inconsistent with Russian Constitution.

Intra-group expenses

Pepeliaev Group advises that in view of new case law, any expenses of a Russian company incurred to make payments to a foreign company within one international group of companies may not be treated as deductible for profit tax purposes. 

Russian law on 'Tax repatriation' Pepeliaev Group advises that the Russian law on “tax repatriation”1 has been signed and will come into force from 2015. This new law may have the following implications:

1. control by Russian persons over foreign structures, including non-corporate ones, will have to be disclosed to the Russian tax authorities; and
2. profits received by foreign structures managed or controlled out of Russia will be taxed in Russia.

Implementing measures to develop Eastern Siberia

For the attention of: managers of companies in Eastern Siberia and companies of the federal and interregional levels operating in Eastern Siberia.

Pepeliaev Group advises of the progress of measures being implemented to develop Eastern Siberia as communicated by the President of Russia in his Address to the Federal Assembly.

VAT and bonuses: practice of the Federal Commercial (‘Arbitration’) Court for the Moscow Circuit VAT and bonuses: practice of the Federal Commercial (‘Arbitration’) Court for the Moscow Circuit

Changes in the procedure for settling tax disputes out of court Pepeliaev Group advises that a law which substantially amends the procedure for how taxpayers can make out-of-court challenges to tax authorities’ decisions and acts or omissions of tax officers comes into effect on 3 August.