11.12.07

Russia’s Ministry of Finance analyzed a situation when an agent’s expenses incurred in fulfilling a contract are not reimbursed by the principal and are not reflected in principal’s accounting and tax reports.

According to the Ministry of Finance, an agent has a right to write these expenses off from its taxable profit. If the principal does reimburse the agent’s expenses, the expenses should not be included into the profits tax base.

The explanation is provided by the Letter of the Ministry of Finance #03-03-06/1/817 from November 20, 2007.

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