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Multilateral convention on implementation of BEPS Plan signed
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 18 August 2017

Russia recently signed the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (BEPS), which was developed to implement Action 15 of the BEPS Plan. Ratification of the convention will be a serious step towards implementing the measures envisaged in the BEPS Plan, which will change the existing double tax treaty system and have a significant impact on the functioning of international groups of companies in Russia.

Federal Tax Service develops concept of unjustified tax benefit
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 23 June 2017

The Federal Tax Service recently issued a notification entitled On Identifying the Circumstances of an Unjustified Tax Benefit, which summarises the law enforcement practice associated with assessing the validity of a tax benefit in disputes relating to bad-faith contracting parties. The notification will contribute to the reduction of companies' tax risks relating to an assessment of the validity of their tax benefit when dealing with contracting parties.

Changes to thin capitalisation rules for profit taxation purposes
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 28 April 2017

Under certain conditions, a company may have a controlled indebtedness, for which the accounting of expenses for profit taxation purposes should be made according to the special rules regarding so-called 'thin capitalisation' stipulated in Article 269 of the Tax Code. Recent changes to the thin capitalisation rules aim to strengthen the barriers that prevent the outflow of capital abroad to the foreign companies of multinationals doing business in Russia.

New procedure for recognition of losses in profit taxation
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 10 March 2017

The procedure for transferring previous years' losses to future tax periods for the purpose of calculating corporate income tax has changed substantially for 2017. Previously, only losses incurred during the 10 years preceding the relevant tax period could be recognised consecutively. As of January 1 2017, the procedure for carrying losses forward has changed and the 10-year limitation on the carrying forward of losses has been abolished.

Tax aspects of cost contribution agreements within MNE groups
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 23 December 2016

During 2015 and 2016 the dispute between taxpayers and the tax authorities regarding the exclusion of multinational enterprise groups' Russian subsidiaries from the requirement to pay corporate income tax on so-called 'intra-group expenses' came under scrutiny. The Russian courts have traditionally treated the actions by affiliated companies in this regard liberally. However, in 2016 Russian court practice began to change in favour of the tax authorities.

Google tax revolutionises tax regime for digital content sales
Gorodissky & Partners
  • Corporate Tax
  • Russia
  • 22 July 2016

The State Duma of the Federal Assembly recently passed a new law introducing significant changes to the taxation of foreign companies selling software and internet services in the Russian territory. The so-called 'Google tax' will require foreign companies providing services in electronic form and selling content online to Russian consumers to register with the Russian tax authorities from January 1 2017.

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