BGP Litigation senior associate Denis Savin speaks with Interfax about the Federal Tax Service's victory in a dispute involving the imposition of additional tax on a corporate acquisition carried out via Cyprus
27.01.2017

"The new provisions on beneficial owners became effective in 2015, and during the period when the transaction was performed the company, as a tax agent, had just one duty to obtain a document confirming that the counterparty organization is a permanent resident of a state that has signed a bilateral double tax treaty, Denis Savin, senior associate at BGP Litigation, told Interfax.

However the court rejected these arguments, ruling that the amendments to Art. 312 of the RF Tax Code are clarificatory in nature and essentially do not alter the rule, and that means the rule that was in effect in 2011 also stipulated that the foreign organization had to have a corresponding right to receive the income, he noted. "The market was aware of the scheme. It was used. Now the legislation and court practice have become more rigorous, so such schemes, which were implemented even in the recent past, today carry significant tax risks", says the lawyer". 

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