Appeals considered by the Russian Federal Tax Service in Q1 2024: an overview

The Federal Tax Service has issued a new Overview of legal positions based on the results of taxpayers’ appeals considered in Q1 2024. The Overview presents 30 points relating to different matters including VAT, administration, identifying actual tax obligations and tax liability, as well as certain matters connected with Part Two of the Russian Tax Code.

In the table below, we summarise the legal positions of the Tax Service which we see as the most interesting and important.

Amendments to the Russian Tax Code: Their Implications for Business

Pepeliaev Group is ready to provide legal support to taxpayers when they prepare for the upcoming amendments to legislation.

The Russian Tax Code has been amended with regard to payroll taxes The main provisions of the draft law, which concerns personal income tax and insurance contributions and has been submitted to the State Duma by the Russian Government.

The Russian Tax Code has been amended with regard to profit tax, VAT, the simplified taxation system and property taxes The provisions of a draft law that concern taxes on entrepreneurial activity and property taxation and has been submitted to the State Duma by the Russian Government.

Appealing against well-grounded opinions in court: first precedents

Pepeliaev Group advises that the Moscow City Commercial Court has adopted resolutions on cases that involve invalidating well-grounded opinions.

The Supreme Court regarding tax on the extraction of gold concentrates

The Russian Supreme Court has solved the issue of a royalty coefficient when mineral extraction tax is assessed on concentrates which contain gold and other precious metals.The Court’s decision allows for excessive tax payments to be avoided and is relevant for all payers of mineral extraction tax.

Amendments to the Tax Code: autumn 2023 A number of amendments to the Russian Tax Code, which have been introduced by a law adopted in autumn 2023. The majority of the amendments will apply starting from the new year of 2024, while some will come into effect later.

Updated rules of the Corporate Tax regime for Free Zone Persons
The earlier published Cabinet Decision No. 55 of 2023 and Ministerial Decision No. 139 of 2023 concerning the Corporate Tax regime for Free Zone Persons have been repealed and replaced 

Amendments have been made to the conditions of tax stabilisation for residents of special economic zones

How to “maintain adequate substance” in a free zone to enjoy a 0% Corporate Tax rate? The requirement to ensure adequate substance for taxation purposes appeared in article 18(1)(a) of the Corporate Tax Law. It stipulates that taxpayers in the UAE’s free zones which “maintain adequate substance” in the UAE may apply a 0% tax rate to qualifying income.

The application form has been approved for excluding from the Unified State Register of Legal Entities (the “USRLE”) a legal entity classified as a small or medium entrepreneur

The Federal Tax Service has approved an application form (form р19001) for the “simplified liquidation” of some small or medium entrepreneurs.

The cash method of accounting in UAE corporate taxation

Article (20)(5)(a) of the Corporate Tax Law  authorizes the MoF to ‘prescribe … the circumstances and conditions under which a Person may prepare financial statements using the cash basis of accounting’. On May 9, 2023 the MoF exercised this authority in Decision No. 114 allowing to ‘prepare Financial Statements using the Cash Basis of Accounting, in any of the following instances: 1. Where the Person derives Revenue that does not exceed AED 3,000,000. 2. In exceptional circumstances and pursuant to an application submitted by the Person to the Authority’. What else do we know about this cash method?