On 21 January 2025, the Constitutional Court of the Russian Federation (hereinafter referred to as the "Russian Constitutional Court") published Resolution No. 2-П on the emergence and taxation of income for a business entity that transfers real estate as payment of the share actual value (hereinafter referred to as "SAV") to an individual who is no longer a member of such entity.

The case was initiated at the request of a Supreme Court judge in connection with the consideration of the cassation appeal filed by LLC "Uspех i N" (case No. A40-244851/2022).

As a result of the proceedings, the Constitutional Court of the Russian Federation declared that several provisions of the Tax Code of the Russian Federation are inconsistent with the Constitution of the Russian Federation to the extent that they allow for differing interpretations regarding the emergence of taxable income for a business entity distributing dividends and the amount of such income.

The contradictory and at times inconsistent stance of the Constitutional Court has drawn sharp criticism from representatives of the legal community.

The tax practice team at VERBA LEGAL, consisting of counselor Evgenia Zainchukovskaya, senior assosiate Andrey Sheptya, and junior assosiate Altana Lidzhieva, analyzes why the position of the Constitutional Court may lead to even more disputes in practice.