29.10.07

Recently Moscow’s North-West District Arbitration Courtruled in favor of a company which used outstaffing.

The company transferred 44 employees to a newly founded enterprise, while work functions and location for these employees remained the same. Tax authorities perceived it as a “concealment of salaries for the purpose of avoiding unified social tax (UST).”

The court decided (Decree of the Federal Arbitration Court N А42-197/2007 from September 28, 2007) that the arguments of the tax authority did not hold up since documents presented by the defense show that the organization’s output and efficiency was improved by the act, thus making it financially justifiable. Moreover, the Federal Tax Inspection did not present satisfactory evidence to prove that the business had purposely concealed objects of taxation and profited by such concealment.

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