Tax law and tax disputes

Types of work and services liable to VAT at zero rate On 27 November 2010, Federal Law No. 309-FZ “On amending chapter 21 of the second part of the Russian Tax Code” was adopted. It significantly amends and adds to the series of provisions of the Tax Code governing the application of zero rate VAT to work and services connected with the export of goods (articles 153, 164 165 and 167 of the Tax Code). The new law will come into force on 1 January 2011.

On what date should property tax be levied on a constructed real estate asset: Russian Supreme Arbitration Court will provide its response Pepeliaev Group advises that on 16 November 2010 the Presidium of the Russian Supreme Arbitration Court will consider on what date property tax should be levied on a constructed real estate asset.

Amendments to the Double Taxation Treaty with Cyprus 7 October 2010 saw the signing of a Protocol on Amendments to the 1998 Double Taxation Treaty between the Russian Federation and the Republic of Cyprus. The Treaty was significantly amended by the Protocol. Many of the Protocol’s provisions clearly aim to combat aggressive tax planning. At the same time, a number of the amendments make Cyprus a more attractive jurisdiction for Russian companies investing abroad.

“Counter-reform” of the VAT Law: New draft law from the Russian Ministry of Finance Pepeliaev Group advises that the Russian Ministry of Finance has published on its official website a draft law  proposing to introduce, from 2011, a series of amendments into the VAT calculation regime, concerning settlement differences, the recovery of tax when property is lost, discounting and other issues affecting the position of companies.

On Recent Amendments to Tax Legislation Pepeliaev Group advises that the State Duma adopted on 9 June 2010 in a second decisive reading the draft law submitted by the Government introducing amendments to Part One and Part Two of the RF Tax Code.

A case on the application of the 32% rate and profit tax legislation of 1994 by contractors under the Sakhalin-II PSA A case on the application of the 32% rate and profit tax legislation of 1994 by contractors under the Sakhalin-II PSA for calculating their profit tax was referred to the Presidium of the RF Supreme Arbitration Court.

Tax legislative initiatives in the aviation sector Pepeliaev Group advises on the most significant draft laws on taxation in the aviation industry.

VAT may be refunded sooner if there is a dispute with a tax authority concerning the refund Pepeliaev Group advises that VAT may be refunded within a shorter period if there is a dispute with a tax authority.

New Resolution of the RF Supreme Arbitration Court on the VAT Rate Applicable to the Export of Technical Documentation Pepeliaev Group advises that Resolution No.17933/09 of the Presidium of the RF Supreme Arbitration Court dated 11 May 2010 has been posted on the court’s official website. The Resolution determines the practice of levying VAT on the export of maintenance and technical documentation in respect of aircraft engines and units and the application of corresponding deductions.

Resolution of the Russian Supreme Arbitration Court on the Deduction of VAT on Unreliable VAT Invoices Has Been Published Pepeliaev Group advises that the Resolution of the Russian Supreme Court on the lawfulness of deducting VAT on VAT invoices containing inaccurate data and signed by unauthorised persons has been officially published.

Inclusion of income in taxable profit in the form of a right to use a trade mark received for no consideration Pepeliaev Group would like to draw your attention to clarifications of the Russian Ministry of Finance on including income in taxable profit in the form of the right to use a trade mark received for no consideration.

A taxpayer may not be disallowed VAT deductions if it did not and could not have known about the tax offence committed by its contracting party Pepeliaev Group advises that the Presidium of the Russian Supreme Arbitration Court has changed its own legal position on a taxpayer’s eligibility to a VAT deduction based on documents made in the name of so-called “deserted companies”, in other words, companies whose nominal directors refused accountability for their operations.