Russia vs Gazprom Chemical Fiber, September 2017, Appeal Court, Case No. А12-39246/2016

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Category: Legality - Legitimacy - Constitutional, Sales and Marketing Hubs | Tag: , ,
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Gazprom Chemical Fiber had previously sold goods directly to the final buyers, but now an intermediate trading hub had been established – the Trading House – through which sales and purchases were now passed.

Following an audit, the tax authorities concluded that the cost of purchasing goods, as well as sales revenues following the establishment of the Trading hub, had been affected by non-arm’s length prices resulting in an understatement of taxable income.

The court of first instance found the tax authorities arguments to be legitimate.
The court of appeal overturned the decision of the court of first instance and ruled in favor of the taxpayer.
The Supreme Court found the appellate court’s decision to be justified.

According to the Supreme Court the tax authorities had gone beyond it’s statutory powers. There were no “multiple deviation” from market prices.

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A12-39246-2016-Gazpromf

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