24.11.08

Relations between companies and their founders can often make tax officials suspicious. For example, one company entered into a contract with its founder, for the provision of business services such as accounting, financial and legal support, external relations, and personnel management support. Tax officials felt the cost for the services purchased was unreasonable and claimed that the company itself could provide such services using its own staff.

The court, recognizing the interdependence of the contract parties, ruled that tax officials did not have the right to mandate contracts be given with discounts. Further, they did not accept the argument that that the company needed to perform the functions itself, i.e. that the services were not "economically justifiable." While Russian law establishes the concept, the court stated that there is no firm definition of it, nor a firm set of requirements that show a company has the employees and structure to fulfill these needed tasks on its own. (Federal Arbitrary Court Decision of the  West Siberia District from October 13, 2008 # F04-6232/2008 (13382-A75-40))

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Source: Российский налоговый портал