Previously, in cases where a taxpayer bought several tranches of the same shares at different times and at differing acquisition costs, it was impossible to determine which specific shares were being sold if only one or some of the shares were disposed of.

The biggest tax case in Russian history, Tax Office v Yukos, is receiving significant attention. The Yukos decision raises several important points of Russian tax law. <P>The profits made by companies related to Yukos and registered in Russian internal offshore zones were 'allocated' to Yukos.

On April 8 2004 the Constitutional Court held in Ruling 169-O that a company is allowed to reclaim value added tax (VAT) from the government only if the purchased goods or services were paid for with the company's own funds, as opposed to borrowings.