2014 12 17 Tax edit

Report
AEB Taxation Committee Business
Meeting:
”Is the Russian Tax Reform
at an end?”
17 December 2014
Ararat Park Hyatt
Alina Lavrentieva
Chairperson of the AEB Taxation
Committee
WELCOME ADDRESS
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Frank Schauff
AEB Chief Executive Officer,
WELCOME ADDRESS
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Round table with Sergey D. Shatalov,
Deputy Minister of Finance and AEB
Taxation Committee experts
IS THE RUSSIAN TAX REFORM
AT AN END?
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
New in tax legislation and
tax practice in 2014
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Anastasia Spiridonova
Deloitte
Tax monitoring - taxpayers start and
win?
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Tax Monitoring
Anastasia Spiridonova
Deloitte
What is Tax Monitoring?
It is a new way of working with the Tax Authorities. The principle is to achieve a
collaborative relationship between the tax authorities and businesses based on trust,
understanding and transparency. The aim is to give the business certainty of the tax
position as quickly as possible.
Who can participate?
How?
 Accrued taxes RUB 300 mln.
 on a voluntary basis
 Revenue RUB 3 bln.
 by singing the agreement for information collaboration
 Assets RUB 3 bln.
 on all taxes and duties
 with electronic communication or online access to ERP
When?
01 January 2016 if the
application submitted till 01 July 2015
 starting from
Period covered
 one calendar year
 open minded dialog in the form of questions and answers
(determined opinion/мотивированное мнение)
 without field visit
Practical implication
Determined opinion (мотивированное мнение)

at request of the taxpayer or by the tax
Benefits and limitations

authorities’ decision

period of consideration of the taxpayer’s request
the determined opinion

is 1 month


no late payment interest if the taxpayer fulfilled
no desk tax audits for the period of tax
monitoring. Exceptions:
transfer pricing matters cannot be a subject of
(1) decreasing tax obligations
determined opinion
(2) early termination of tax monitoring
resolve of conflicts in Federal Tax Service
(3) late submission of tax return
(4) claiming VAT or excise from the budget

no field tax audits for the period of tax
monitoring. Exceptions:
(1) and (2) as above
(3) initiated by the higher tax authorities
(4) non-following of the determined opinion
Making a rational decision…

Is company’s tax function ready for tax monitoring?

Are there adequate resources to support the workload?

Can the amount of possible exposure be predicted?

Does the overall tax risk appetite hinder the use of tax monitoring?

Ability to commit to high level of transparency?
The tax authorities have publicly announced that they will approach Tax Monitoring in a positive manner.
Denis Zaytsev
DS Law
New in disputing cadaster value
of assets and land plots
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
New in disputing cadaster value
of assets and land plots
Denis Zaytsev
DS Law
New in legislation
Federal law № 143-FZ dated 04 June 2014:
Change of subject-matter jurisdiction. All disputes regarding challenge of
cadaster value of assets and land plots have been passed to the courts
of general jurisdiction.
Federal law № 225-FZ dated 22 July 2014:
- right to amend draft of project of evaluation of cadaster value;
- obligatory pre-trial disputing of cadaster value for legal entities;
- new concrete terms of evaluation of cadaster value;
- new terms to dispute results of conducted evaluation of cadaster
value;
- new order to approve change of cadaster value under decision of
commission or court.
New in court practice
Ruling of Presidium of Highest Commercial Court of the RF dd.
11.02.2014 case № 13839/13
Decision of Commercial court of Krasnoyarskiy krai dd. 09.12.2014 case
№ А33-11253/2012
Ruling of Tenth commercial appeal court dd. 12.11.2014 case № А4135176/14
Order of Supreme Court of the RF dd. 12.11.2014 case № 5-АПГ14-52
Ruling of Commercial court of North-Caucasian district dd. 04.12.2014
case № А53-3588/2014
New in disputing cadaster value of assets and land plots
Thank you for your attention
DS Law
Mikhail Orlov
KPMG
Legislative developments in
VAT calculation procedure
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Legislative developments to the
procedure for calculating VAT
Mikhail Orlov
Partner, KPMG
Head of Tax&Legal, Russia&CIS
Federal Law No. 382-FZ dated 29 November
2014 (enters into force from 1 January 2015)

Russia will be deemed the place of supply for air transportation services
provided by Russian airlines if the goods are transported between two points
outside Russia and the aircraft lands in Russia. Such services will be subject
to the zero percent VAT rate (clause 1 of Article 148 and clause 1 of Article
164 of the RF Tax Code)

Taxpayers will have the right to offset input VAT in any period within three
years of the booking of the goods (work, services) and property rights in the
accounting (clause 1.1 of Article 172 of the RF Tax Code)
Federal Law No. 382-FZ dated 29 November
2014 (enters into force from 1 January 2015)

Taxpayers will have the right to offset input VAT in the period when the
goods (work, services) were purchased even if the VAT invoice is received in
the next period, but before the filing date of the VAT tax return for the
previous tax period

The deadline for filing the VAT tax return and VAT payment is extended for
five days
Federal Law No. 366-FZ dated 24 November 2014 (enters
into force from 1 January 2015)


There will be no need to restore input VAT related to goods, work, services
used in activities subject to the zero percent VAT rate (sub-clause 5, clause 3
of Article 170 of the RF Tax Code)
It will be possible to fully offset input VAT related to expenses, whose
deductibility has been limited for corporate income tax purposes (clause 7 of
Article 171 of the RF Tax Code)
Order No. ММВ-7-3/558@ of the Russian Federal Tax
Service dated 29 October 2014

The new form of the VAT return, which will include information from the
sales and purchases ledgers, is currently awaiting registration at the Russian
Ministry of Justice
Vladimir Konstantinov
PwC
Court practice on VAT matters
(bonuses, inventory losses, advertising,
international transportation)
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
Court practice on VAT matters
(bonuses, inventory losses, advertising,
international transportation)
Vladimir Konstantinov
PwC
Agenda
• Bonuses
• Resolution #33 of Plenum of Supreme Arbitration Court
2
Bonuses
The nature of bonuses:
? Reduction of sales price
? Payments for sales promotion services
? VAT neutral incentive payments
3
Bonuses
Leroy Merlin case - Decision of the Presidium of the Supreme
Arbitration Court of the Russian Federation #11637/11 of 7 February
2012
• Bonuses are trade discounts
• Input VAT recovery reversal
• Significant risk for significant amount
4
Bonuses
*Impact of Leroy Merlin case
Has the risk materialized?
• Tax audits
• Court practice
5
Bonuses
Court practice
positive
2012
2013
2014
negative
12/02/12
6
Bonuses
*Pattern of decisions? (1 of 2)
•
Bonuses do not change price under the contract
•
No corrective VAT invoices
11/06/2014
21/06/2014
Sodexo EuroAsia LLC
Castorama RUS LLC
Cassation level (Moscow Region)
Cassation level (Moscow Region
#A40-976590/13
#A40-39492/13
Period: 2010 – 2011
Period: 2009 - 2010
Judges:
Judges:
•
KOROTYGINA N.V.
•
BUYANOVA N.V.
•
BUYANOVA N.V.
•
EGOROVA T.A.
•
SHISHOVA O.A.
•
SHISHOVA O.A.
7
Bonuses
*Pattern of decisions? (2 of 2)
•
Bonuses do not change price under the contract
•
10/10/2014
No corrective VAT invoices
10/11/2014
Pharmperspectiva LLC
Castorama RUS LLC
Supreme court
Supreme court
#306-КГ14-1504
#305-КГ14-3243
Period: 2009 – 2010
Period: 2009 - 2010
Judge - PERSHUTOV A.G.
Judge - PERSHUTOV A.G.
VAT recovery should not be
reversed
VAT recovery should be reversed
8
Bonuses
*Conclusions
• Risk of loss has increased
• Tax environment
• Risk management – various scenarios are possible
9
Overview of the Resolution of SAC Plenum
• Resolution on VAT matters (no. 33 dated 30 May
2014);
• Significance of the Resolution.
10
Inventory losses
Inventory losses – output VAT due?
•
Reasons – outside control of tax payers
•
Documents
•
Volume of losses – “common level”
11
Advertising materials
Range of free distribution which does not
trigger VAT costs is changed (reduced)
•
Items which may not be regarded as “goods”
12
Thank you for attention
Vladimir Konstantinov
PwC
Partner, Indirect Tax Leader
[email protected]
Tel.: + 7 (495) 967 6236
Alexander Erasov
GOLTSBLAT BLP
Tax crimes investigations –
New dangers for business and
defense tactics
AEB Taxation Committee Business Meeting: ”Is the Russian Tax Reform at an end?”, 17 December 2014, MOSCOW
TAX CRIMES INVESTIGATIONS - NEW
DANGERS FOR BUSINESS AND DEFENCE
TACTICS
Alexander Erasov
Senior Associate / Tax Dispute Resolution / Tax Crime Defence
Goltsblat BLP
Goltsblat BLP LLP is the Russian practice of Berwin Leighton Paisner (BLP), an award-winning international law firm with offices in London,
Moscow, Abu Dhabi, Beijing, Berlin, Brussels, Dubai, Frankfurt, Hong Kong, Paris and Singapore
AEB Business Meeting: "IS THE RUSSIAN TAX REFORM AT AN END?”, December 17, 2014, Moscow
What has changed?
PLUS
– The list of actions falling within the scope of
property and money laundering (legalisation) is
expanded
– The Deoffshorisation Law is adopted
– Amendments to Art. 199 of the Criminal Code (tax
evasion by an organisation) are expected
– The draft law “on tax right abuse” is on the agenda
What might it lead to?
Relief from criminal liability for tax
crimes
 Termination of statute of limitations
 Active repentance
 Special grounds and conditions for relief from criminal
liability for tax crimes
o Tax evasion and failure to withhold tax (Articles 198-1991
of the Russian Criminal code)
• Tax arrears + fines and late payment interest are paid in full
• Payment is made before a court session is appointed
o Concealment of monetary resources or property for
recovering tax arrears (Article 1992 of the Russian Criminal
code)
• Six-fold recovery of damages
Here come the police – defence
tactics
 Search and detection agents
 Investigative Committee of the
Russian Federation
 Agree your actions with your
lawyer/advocate
– Do not be in a hurry to submit
additional evidence - the less
you provide to law enforcement
officers, the higher your chances
of later improving the situation
 The information stated in your
documents should be in line with
data from other sources – do not
disprove yourself, leave this to the
officers
Here come the police – defence
tactics
 CALL YOUR ADVOCATE
 Do not get in the way of law enforcement officers (though you are not obliged to help)
 Monitor all actions taken by law enforcement officers
 Do not destroy or delete any documents, correspondence or phone messages
 Do not provide false information
 Avoid provoking the officers
 Neither discuss nor give any explanations
on the merits
 Do not give in to psychological pressure
exerted by law enforcement officers
Thank you for your time & attention
Alexander Erasov
Senior Associate
Tax Dispute Resolution / Tax Crime Defence
Goltsblat BLP
+7 (919) 778 67 77
[email protected]
AEB Business Meeting: "IS THE RUSSIAN TAX REFORM AT AN END?”, December 17, 2014, Moscow
Q&A
AEB Open Event: Round Table ”Internal Communications: Best Practices”, 19 JUNE 2014, MOSCOW

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