BGP Litigation senior associate Denis Savin speaks with Interfax about the ongoing dispute between Suzuki Motor Rus and the Federal Tax Service

"In the case that was won, the key issue of the applicability of the resale price method was not considered, and the tax inspectorate essentially brought tax claims not in relation to the purchase price, but to the negative gross profit margin of a small portion of the company's total transactions, which was lower than on other vehicles that had been sold, adds Denis Savin, senior associate at BGP Litigation". 
"Ordinary income is calculated by tax officers on the basis of the company's profitability index in an earlier period. "This problem would not have occurred had the foreign company lowered prices based on market demand, and had not subsequently put in money to cover the Russian company's negative net assets", explains D. Savin. According to him, the automotive industry has now lost such disputes. "This case is important for companies that sell goods at lower than cost – especially if they are exclusive distributors", he concludes"".