Tax law and tax disputes

The Supreme Commercial (‘Arbitration’) Court on taxing bonuses paid by banks to VIP clients Pepeliaev Group advises that on 9 April 2013 the Presidium of the Russian Supreme Commercial (‘Arbitration’) Court issued a ruling concerning the case of Citibank. In the ruling, the Court resolved the issue of taxable income arising when VIP clients receive bonuses from banks. 

The procedure for paying VAT on bonuses paid to clients is set out in the law

Regime for calculating the tax base for mineral extraction tax Pepeliaev Group advises that on 29 January 2013, the Presidium of the Russian Supreme Commercial (‘Arbitration’) Court (the “SAC”) will consider the regime for calculating the tax base for mineral extraction tax (“MET”) if, in addition to minerals for which the tax base is cal-culated using the estimated method, the company extracts minerals for which the tax base is de-termined using other methods.

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’.

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.

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.

Personal income tax: the start of 2012 tax return filing period Pepeliaev Group remind you about the start of the filing period for 2012 returns. Individuals who generated taxable income in 2011 and have not paid personal income tax on it may start filing their tax returns now. The last day of the filing period is 30 April 2012. Under the general rule, individuals must pay the personal income tax, as stated in their returns, before 15 July 2012.

Significant changes to the application of Russian thin capitalisation rules Pepeliaev Group advises that the Russian Supreme Arbitration Court (the “SAC”) has published on its web site Resolution No. 8654/11 dated 15 November 2011 in the case of OAO Coal Mine Severny Kuzbass touching upon the issues connected with the application of the Russian thin capitalisation rules. The resolution changes the existing case law in a significant manner with regard to what should take priority: non-discrimination provisions of international double tax treaties or Russian thin capitalisation rules.