03.06.08

"Better safe than sorry" should be the mantra of entrepreneurs in Russia. In a recent case, the Russian tax authorities assessed additional profit tax, a fine and a penalty fee on a business because the business's contractor was not listed on the Unified State Register of Legal Entities, and thus was not recognized as a legal entity in Russia.

A court declared the taxpayer in question "dishonest" because it is the taxpayer's responsibility to ensure that those businesses it contracts are operating legally. Therefore, all businesses are advised to check the registration of contractors prior to signing any agreements.

(Resolution # Ф09-2950/08-С3 from April 29, 2008 of the Federal Arbitration Court of the Urals region).

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Source: Российский налоговый портал