Russian VAT on e-services: Breaking news

As you know, under the Russian Federal Law No. 335-ФЗ of 27.11.2017 all foreign e-services providers must register with the Russian tax authorities and pay Russian VAT themselves. This has given rise to many questions and technical difficulties. On 24April 2019 the Russian Federal Tax Service (“FTS”) issued the long-awaited guidance letter No. СД-4-3/7937@, where they attempted to adequately address these issues. The major conclusions discussed in the letter can be summarized as follows:

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Non-electronic services by e-services providers: VAT payment procedure

Dentons’ tax experts are keeping you posted on the latest news regarding payment of VAT on electronically supplied services (“e-services”). Today, we would like to elaborate on the topic in the light of article 161 of Russian Tax Code (“RTC”). This provision states that Russian companies should withhold VAT (act as a tax agent in the terms of the RTC) for goods/services supplied from Russian territory only if the foreign supplier does not have Russian tax registration. Continue reading “Non-electronic services by e-services providers: VAT payment procedure”

Development of court practice regarding regional tax incentive application regarding real estate fixed assets in Moscow Region

On 5 February 2018, the Arbitration Court of Moscow Region delivered its decision (hereinafter, the “Decision”) on ZKK VODOKANAL (the “Company”) (case No. А41-50945/17). The case considered the issue of determining the moment when the right to apply Moscow regional property tax incentive arises (hereinafter, the “Incentive”). Continue reading “Development of court practice regarding regional tax incentive application regarding real estate fixed assets in Moscow Region”

New capital amnesty

On 19 February 2018 the President of Russia signed three federal laws[i] which extended the capital amnesty campaign and timeframes for tax-exempt liquidation of foreign companies and unincorporated structures. Continue reading “New capital amnesty”

Development of court practice regarding application of the beneficial owner concept

On 2 August 2017 the Commercial Court of Kaliningrad Region delivered its decision (the “Decision”) on NPO Digital Television Systems (the “Company”) (case No. А21-2521/2017). The Decision is currently about the only positive example of the most recent court practice of the Russian courts dealing with application of the concept of the “person beneficially entitled to income” (the beneficial owner concept). Continue reading “Development of court practice regarding application of the beneficial owner concept”

Development of court practice on tax disputes over charging personal income tax on amounts paid to employees by agreement at termination of employment

On 16 June 2017 the RF Supreme Court rendered a ruling in case No. А42-7562/2015. In this case the court considered a dispute between Murmansk Trawl Fleet PJSC (hereinafter MTF) and the Federal Tax Service Interdistrict Inspectorate for Major Taxpayers in Murmansk Region. One of the subjects of the case was the charging of personal income tax on amounts paid to an employee by agreement between the employee and the employer at termination. Continue reading “Development of court practice on tax disputes over charging personal income tax on amounts paid to employees by agreement at termination of employment”

Development of court practice on tax accounting of inventory shortages

On 19 May 2017 the Arbitration Court of the Moscow Region rendered a decision in case No. А41-69837/2016 under the claim of KVINTMADI Closed Joint Stock Company (the “Company”). Continue reading “Development of court practice on tax accounting of inventory shortages”