Goltsblat BLP advises that the Russian State Duma has passed a
"tax abuse" draft law, which is currently pending with
the Federation Council, then to be signed by the Russian
President.
The Tax Code will have a new article (54.1) prohibiting any
reduction in the tax base/amount if (1) business facts or (2)
taxable items have been misrepresented.
Two conditions will have to be met for reducing the tax
base/amount: (1) it is not the transaction's primary objective
to avoid (offset) taxes; and (2) the contractual obligation has
been discharged by the party to the contract or a person empowered
to do so by the contract or by law.
The law will effectively oblige taxpayers to check on who
actually performs contractual obligations and whether there are any
grounds for contracts to be performed by other parties. Under this
new provision, if there are no documents confirming proper
performance, expense or VAT deductions may be denied.
