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Chet Bowling,
Managing Partner | |
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Welcome!
Alinga is pleased to announce that we now have an English-language Facebook and LinkedIn page. We’ll be using these pages as a way to bring you more frequent information on Russian tax, accounting, and legal news, as well as general information on Russian business, the Russian economy, and the occasional "just for fun" post.
Our Market Update will continue in the same format, with regular mailings in both English and Russian. Of course, our services are still the same as well. Alinga Consulting Group provides clients with practical experience, professional know-how, and confidentiality through reliable and cost-effective business support services and development strategies. By providing a challenging and rewarding work environment, we demand high value and performance from our team, and deliver even higher value in results to our clients.
Contact us today with suggestions on how we can do better – or to hear ways that Alinga can help your business do better in terms of tax optimization, accurate reporting, compliance, and more!
If you have comments, questions, or suggestions on other ways we can improve our site and newsletter, please contact the editor! To subscribe to this newsletter, send an email with "Subscribe Alinga" in the subject field to our editor.
Valuing Property Received From Subsidiary Liquidations For Tax Purposes In Russia
The Ministry of Finance (MinFin) very unexpectedly decided to do a favor to owners liquidating LLCs in Russsia. In its opinion, if, in the process of dividing assets, shareholders receive property rather than funds, this property 1) is not recognized as uncompensated; 2) may be included in tax accounting according to the market price of this property on the date it was received, even though the Tax Code does not contain norms for its valuation. MinFin is apparently ready to also allow property to be similarly valued when received when shareholders opting out from an LLC and also in the process of liquidating an LLC. The Ministry even supported a proposal of the Federal Tax Service on introducing appropriate legislative amendments for these situations.
Reporting Taxes Paid Abroad As Expenses For A Russian Organization
The Tax Service allows organizations to expense taxes paid abroad even if the Tax Code does not include double taxation provisions. Thus, the Tax Authorities are openly defying a higher financial authority (based on the Letter of the Federal Tax Service N ÅÄ-20-3/1087 from September 1, 2011). The Ministry of Finance (MinFin) has more than once stated that foreign taxes may not be expensed on the basis of Article 264, paragraph 1, sub-paragraph 1, nor Article 264, paragraph 1, sub-paragraph 49 of the Tax Code, due to the fact that Russian taxes may be decreased in such instance when double taxation provisions exist. The Federal Tax Service has stated that profit tax can be reduced by VAT paid abroad and other taxes accounted for as miscellaneous expenses.
IFRS And International Financial Reporting Interpretation Implemented In Russia
Federal Law N 208-ÔÇ from July 27, 2010 “On Consolidated Financial Accounts” prescribes consolidated financial accounting for organizations to be compiled in accordance with International Financial Reporting Standards (IFRS). Russia employs IFRS and Interpretation of IFRS, enacted by the IFRS Foundation and officially recognized by the Russian Government (Decree # 107 from February, 25, 2011). The Ministry of Finance issued Order # 160í from November 25, 2011 “On Implementing IFRS and International Financial Reporting Interpretation in the Russian Federation” which has made IFRS legally official in Russia.
Risks of Tax Optimization Through Loans From Foreign Companies
A landmark decision was made by the Presidium of the Supreme Arbitration Court of the Russian Federation in a dispute between the Interregional Inspection #1 of the Federal Tax Service and the Northern Kuzbas coal-mining company. The Presidium of the Supreme Arbitration Court in its ruling ¹ ÂÀÑ-8654/11 from August 12, 2011, announced that issues related to assessment of costs for tax purposes are within national jurisdiction. By this decision Presidium of the SAC closed the chapter on disputes about “thin capitalization”. The Supreme Arbitration Court then took a position completely opposite from the courts of first three instances, overturning the previous decisions.
Intellectual Property Court to be Created in Russia
Currently due to the understaffed field of intellectual property rights jurisprudence, vague knowledge of its specifics and not always present objectivity of those involved, intellectual property cases generally take up to several years to process, which is much longer than, for example, family or labor law disputes.
Federal Law "On Personal Data"
Alinga Consulting Group on regular basis holds seminars covering the practical application of major changes to taxation and accounting rules. We offer you one of the presentations (PDF, in Russian only) prepared for the most recent seminar by Larisa Ryazantseva, Senior Lawyer of Alinga Consulting Group, on Federal Law “On Personal Data”. Other presentations from the seminar may be found here.
Russia Plans to Ban Tobacco Philanthropy
Russia’s Health and Social Development Ministry is considering legislation to prevent international tobacco companies from dispensing grants to Russian charities. How much money would this mean? The Moscow Times reports that the three biggest multinational tobacco companies (British American Tobacco, Philip Morris, and Japan Tobacco International) apparently donate $6 million to Russian charities annually. Already, Russian law prohibits tobacco companies from giving to causes for children and sports—big-time charitable issues in Russia—so the “tobacco companies give particularly large sums to initiatives that support old people,” an area with typically less appeal to corporate donors.” Note that domestic Russian tobacco companies apparently do not give money to charities.
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25.01.12
English
