Countries: Russia

Russia vs LLC OTIS LIFT, December 2021, Arbitration Court of Moscow, Case № А40-180523/20-140-3915

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The Russian company LLC OTIS LIFT carries out service and maintenance activities for lifts and escalators both under the registered trademarks and designations of Otis and lifts and escalators of other manufacturers. A License Agreement was in force between the Russian subsidiary and its US parent OTIS ELEVATOR COMPANY (NJ) (Licensor). In accordance with the License Agreement, LLC OTIS LIFT should pay to OTIS ELEVATOR COMPANY (NJ) an amount equal to three and a half […]

Russia vs PJSC Vimpelcom-Communications, May 2021, Arbitration Court of Moscow, Case No. A40-36350/21-140-1024

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PJSC Vimpelcom-Communications submitted to the tax authority a revised notice of controlled transactions for 2017, under which contract numbers for 68 transactions were adjusted, including an agreement with a foreign counterparty Veon Wholensale Services B.V. (Netherlands) for the provision of agency-services (the “Controlled Transactions”), and information was also provided on another transaction with another foreign counterparty. Based on the revised notification, the Russian Tax Authorities issued a decision on 29 December 2020 to conduct an […]

Russia vs ViciunaiRus LLC, April 2020, Supreme Court, Case No. A21-133/2018

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ViciunaiRus LLC was engaged in production and wholesale distribution of its products. During the inspection, the inspection concluded that the chain of contractual relations between the Company and its sole official distributor in the Russian Federation artificially had established intermediates that do not have assets and personnel. At the same time, the price of products increased by more than 20% in the course of movement along the chain of counter parties. During the period from […]

Russia vs PJSC Uralkali, November 2019, Supreme Court Review Panel, Case No. А40-29025/2017

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PJSC Uralkali, produced and sold fertilizers (“potassium chloride”) through a related Swiss trader. Uralkali had informed the authorities about the controlled transaction and submitted the required TP documentation. To substantiate the pricing of the transaction they had applied the transactional net margin method (TNMM) with the Swiss trader as the tested party. The Russian tax authorities disapproved of the choice of method and the way the method had been applied. They conducted an analysis, using […]

Russia vs Garnet-SPb, June 2019, Court of Appeal, Case No. A56-113775/2017

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Garnet-SPb was the exclusive representative of a German manufacturing company in Russia. Following introduction of restrictions on the supply of certain categories of goods to Russia by the European Union in 2014, the Company had used the services of an intermediary trading company. The intermediary offered the Company to purchase products previously purchased directly from the manufacturer. The difference between the export price of goods according to the manufacturer’s data and the price at which […]

Russia vs PJSC Uralkali, April 2019, Court of Appeal, Case No. А40-29025/2017

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PJSC Uralkali, produced and sold fertilizers (“potassium chloride”) through a related Swiss trader. Uralkali had informed the authorities about the controlled transaction and submitted the required TP documentation. To substantiate the pricing of the transaction they had applied the transactional net margin method (TNMM) with the Swiss trader as the tested party. The Russian tax authorities disapproved of the choice of method and the way the method had been applied. They conducted an analysis, using […]

Russia vs RIF Trading House, April 2019, Moscow City Court, Case No. No. A40-241020/18

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In 2014, RIF Trading House sourced and bought agricultural products in Russia – wheat, barley, corn and peas. These products were then exported to a trader in the UAE, which turned out to be related to RIF Trading House. However, RIF Trading House had not provide information on the relationship, nor the required transfer pricing documentation on the controlled transactions. Following an audit, the Russian Federal Tax Service came to the conclusion that the export […]

Russia vs LLC “Neftemash-Service”, June 2019, Supreme Court, Case No. A56-113775/2017

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Neftemash-Service LLC sold real estate (administrative and warehouse building, land plots, part of a workshop building) to two individuals that were also founders of the company and held the positions of general director and commercial director. The Company claimed the transactions were caused by an urgent need for capital, and that the reason for selling directly to the founders was that no third parties were interested in buying the properties. The Russian tax authorities held […]

Russia vs LLC Bogoroditskoye, February 2019, Court of Appeal, Case No. А62-8105/2017

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LLC Bogoroditskoye processed and preserved fish and seafood. During the period under review, these products were sold only to related parties. Following an transfer pricing audit, where the TNMM method was used, the tax authority concluded that the price of products paid by the related parties had been significantly lower than market prices, and that the non-arm’s length pricing had lead to an unjustified tax benefit. LLC Bogoroditskoye disagreed and brought the assessment to court […]

Russia vs Ashin Steel Trading House, February 2019, Court of Appeal, Case No. A76-19287/2018

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A group company, PI, purportedly provided management services to the Ashin Steel Trading House. During the audit for FY 2013-2015 the tax authority came to the conclusions that Ashin Steel Trading House and the PI had “deliberately created a management relationship scheme so that service providers are listed on the staff of an entrepreneur who pays tax on the ONS with the object of taxation “income””. Significant sums of money was transferred to PIs in […]

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