Юридическая фирма VERBA LEGAL

All practices

Tax Advisory and Litigation

Our Practice

Our Tax Advisory and Tax Dispute Resolution team has a high level of expertise and broad experience in tax advice, settlement of tax disputes, and tax due diligence, including due diligence in M&A transactions.

Our lawyers develop and implement optimal tax planning strategies and efficient Russian and foreign asset holding structures, and assist in raising finance in a tax-efficient manner.

The team members protect the rights and lawful interests of our clients at a pre-trial stage and in court in relation to disputes with tax and customs authorities over a broad range of legal matters. We have managed to significantly reduce or fully eliminate additional tax and customs assessments multiple times.

Our lawyers help identify and recover overpaid taxes and, also, identify, well in advance, the tax risks which materialization may impact the price in asset sale transactions.

services

1/ Tax Advice

VERBA LEGAL provides legal and methodological support on all matters of personal and corporate taxation. We work with both small startups and large companies, including those with government participation.

2/ Tax Structuring

VERBA LEGAL assists clients in structuring the ownership of Russian and foreign assets, taking into account possible tax benefits and preferences. In the first phase of the project implementation, we conduct a comprehensive analysis of the tax system of the client's country of interest. In the second phase, we develop a "roadmap" for our actions. In the third phase, we implement the strategy in practice.

3/ Tax Sections of Due Diligence Process

VERBA LEGAL helps clients promptly identify and eliminate tax risks that arise during business operations, as well as identify and realize tax reserves. We conduct a comprehensive review of the accuracy and timeliness of tax (fee) payment obligations, including situations involving the acquisition of assets in the context of M&A transactions.

4/ Transfer Pricing

VERBA LEGAL provides support to clients conducting transactions that meet the criteria of controlled transactions, including the preparation of notifications and transfer pricing documentation. Additionally, we offer methodological support on matters related to the conclusion of multilateral (bilateral) transfer pricing agreements and the preparation of country-by-country reports.

5/ Investment-related Tax Support Services

VERBA LEGAL provides tax support to clients making investments in the form of capital expenditures. We diagnose the client's activities to determine the applicability of tax benefits and preferences, calculate the potential benefits from using tax regimes for investors, and assist in the procedures for obtaining investor taxpayer status.

6/ Tax Dispute Resolution

VERBA LEGAL provides comprehensive support to clients during tax audits and in appealing the results of tax inspections at both the pre-trial and trial stages. We have extensive cross-sector expertise, enabling us to develop effective tax dispute strategies and deliver positive outcomes for our clients.

7/ Special Projects Practice

VERBA LEGAL collaborates with non-profit associations representing the interests of entrepreneurs in various economic sectors. We conduct scientific and practical research on taxation issues to justify the need for changes to existing legislative regulations.

8/ Currency Control

VERBA LEGAL provides clients with advisory support on interactions with currency control agents in relation to export-import operations and international settlements between residents and non-residents.

Experience Highlights

Tax Advice

We advised:

a cloud-based CCTV platform developer on tax aspects in connection with the change of ownership of operational companies within the Russian and U.S. perimeter by way of establishment of an SPV, multi-form reorganization, re-domiciliation of the holding company to the Special Administrative Region, etc.;

a U.S. NYSE-listed company in relation to application of the "look-through" approach to taxation of dividends taking account of the limitation of benefits rules and Technical Explanation accompanying the U.S. Model Income Tax Convention;

a Russian sparkling wine producer on tax issues arising in connection with a transfer of shares in a Hong Kong company to a Russia-based ultimate beneficial owner;

a leading digital multimodal freight forwarding agent implementing innovative logistics techniques on tax aspects of restructuring of intra-group loans with a foreign dimension;

a Russian company on tax aspects of establishment of an investment fund involving an SPV-based project finance structures, convertible loan agreements and a closed-end investment fund;

Russian and foreign clients as part of provision of the М&А and restructuring tax advisory services that involved untying the knot of intra-group debts taking account of the corporate and sanction restrictions in connection with the sale of Russian businesses by foreign companies (including preparation of tax sections of the transaction documents).

Tax Support Services in M&A Transactions

We advised:

a Russian publicly held Internet company on tax issues of the delisting from NASDAQ and transition to the Russian jurisdiction through the Special Administrative Region, including drafting of tax sections of the tender offer documents for a buy-back and exchange of shares from listed and institutional investors;

Russia's only optical fiber manufacturer on tax aspects of the disposal by a U.S. seller of its wholly-owned interest in the Russian business entity;

Russia's biggest insurer in relation to retrospective application of Paragraph 7 of Article 284.2 of the Russian Tax Code to persons targeted by foreign sanctions;

an Italian pharmaceutical company operating in Russia in relation to tax exposure and risks of a disposal of its R&D laboratory using the Share Deal or Asset Deal structures;

a high net worth individual on various issues of tax-free transition of a controlled foreign company's assets to Russia;

the biggest foodservice chain on various issues of the transfer of assets to Russia, including by way of re-domiciliation to the Special Administrative Region;

on over fifty tax due diligence projects in M&A transactions, and identified multimillion tax risks and tax provisions.

Tax Support Services to IT Companies

We advised:

the biggest Russian banking software developer on tax privileges applicable in connection with the IT tax maneuver, subject to clarifications of Russia's Finance Ministry dated September 19, 2023, No. 03-03-06/1/89221;

a leading Russian online train and air tickets booking service in connection with the state accreditation as an IT company;

a streaming service developer in relation to the tax privileges and preferences applicable in connection with establishing IT companies in the CIS countries (Armenia, Kazakhstan, Kyrgyzstan, Uzbekistan);

a marketplace accredited as an IT company on various issues relating to the IT tax maneuver;

a Russian IT company as part of the tax due diligence to verify compliance with the conditions for application of tax benefits under the IT tax maneuver;

one of Russia's biggest software developers in relation to the group structuring for simplification of the ownership structure, procuring confidentiality and retaining the right to IT privileges;

a web platform in relation to drafting documents (i.e. the security file) to confirm the lawfulness of application of IT privileges in case of establishment of a new company and transition of developers to the so established new company.

Tax Support Services to Pharmaceutical Companies

We advised:

a number of pharmaceutical companies on various issues relating to VAT on medical products and accessories thereto in the event of a separated importation into the Russian Federation;

Russia's Healthcare Ministry in connection with preparation of the Analytical Report on application of tax privileges and preferences to the sales of medicines and medical products;

pharmaceutical companies on various tax consequences and risks relating to transfers of know-how to foreign counterparties;

a medical products importer in connection with the preparation of the "security file" to justify the lawfulness of application of a reduced 10-percent VAT rate in the event of an incorrect indication of the OKPD2 code (i.e. a code in accordance with the All-Russian Classifier of Products by Types of Economic Activities) in the registration certificate;

Russian manufacturers and suppliers of medicines on various issues relating to amended TN VED codes (i.e. codes in accordance with the Foreign Economic Activity Commodity Nomenclature) for the purposes of application of VAT relief;

a number of pharmaceutical companies on evaluation of tax exposure and risks in connection with the incentives for achieving purchasing volumes;

an operator of the observational medical studies in relation to application of personal income tax privileges under the patient support programs.

Tax Support Services to Transport and Logistics Companies

We advised:

a Russian airline on various tax issues relating to its operational activities, including domestic and international flights;

a Russian airline on VAT issues in connection with the performance of a codeshare agreement;

a foreign company on assessment of tax consequences of the sale of aircraft located both in and outside the Russian Federation;

a Russian transport company on taxation of oil products transport operations involving foreign freights carriers;

a forwarding and logistics group in connection with the preparation of the "security file" to minimize tax risks stemming from the use of services provided by technical companies;

a Russian company on tax aspects on vessel transactions, including acquisition, lease, subletting, and international refrigerated cargo transportation services;

a subsidiary of the VEB.RF State Corporation on application of regional tax privileges in respect of helicopters;

a Russian distributor of Dongfeng, a Chinese carmaker, in relation to importation of Category M1 electric vehicles in Russia.

Property and Development Tax Support Services

We advised:

a number of major grid companies in projects aimed at identification and realization of corporate property tax provisions relating to incorrect treatment of fixed assets (including transformer substations, switchyards, electricity transmission lines and other temporary structures) as immovable assets;

a construction company listed among systemic development companies in connection with preparation of a legal opinion on enhancing the group's tax efficiency and mitigation of the existing tax risks;

a company offering a full range of commercial property engineering, construction and installation services in connection with the development of the internal know-your-customer policies and procedures;

a Russian pharmaceutical company on tax aspects of accounting of inseparable improvements in leasehold property depending on a lessor's consent/refusal of consent;

a company specializing in collectible real estate on tax issues relating to a sale of a renovation-in-progress building.

Tax Support Services to Banks and Financial Institutions

We advised:

a debt collection agency of the major Russian bank in connection with the tax audit in relation to accounting of bad debts acquired under assignment agreements as non-operating expenses for profit tax purposes;

a Russian subsidiary bank of one of the biggest international banking groups on taxation of the transfer of gift certificates under the loyalty programs and employee incentive schemes;

a subsidiary bank of the international banking group in pre-trial proceedings in a tax dispute over deductibility of losses in relation to assignment of discounted receivables under the co-lending operations;

a Russian brokerage on tax aspects of replacement of Eurobonds and issuance of Russian shares in lieu of the depositary receipts of the quasi-Russian companies under the Economically Significant Entities Law;

a subsidiary bank of the international banking group on assessment of tax risks stemming from provision of intra-group services and setting up a permanent establishment in various jurisdictions;

one of Russia's major banks in connection with the due diligence, including tax due diligence, relating to acquisition of the owner of several office centers.

Tax Support Services to FMCG and Retail Sector Companies

We advised:

a European online retailer on tax structuring issues in connection with the logistical restructuring, inclusion of an intermediary company registered in a foreign jurisdiction into the retailer's supply chain, and the use of marketplaces for its retail operations;

a Russian subsidiary of a major European perfume and beauty products retailer in relation to drafting of transfer pricing documents, including advice on ongoing tax matters and structuring of intra-group operations;

a major Russian web platform on assessment of tax risks arising in connection with sales of products with the use of the agency (commission) model and on drafting tax clauses of the public offer;

a Russian online retailer on taxation of purchasers (both individuals and legal entities), including special tax treatment of such purchasers;

a major Russian retailer in connection with the development of the inventory write-off methodology;

a Russian marketplace on application of tax privileges by IT companies;

a major retailer on various matters relating to proper inclusion of royalties, dividends and agency VAT into the customs value of imported products.

Private Capital

We advised:

top managers of a Russian company on tax, corporate and counter-sanction matters relating to implementation of the incentive scheme, including a conversion of the so-called "phantom" shares in a company re-domiciled from the Netherlands to the UAE into the real shares by way of investments into both the parent and Russian operating companies;

a Russian high net worth individual on structuring the transfer of foreign assets (shares, receivables, property, cash) from Luxembourg- and Seychelles-based controlled foreign companies to Russia with the use of the temporary option of a tax-free transfer of assets;

a beneficial owner of one of Russia's biggest gold mining companies on tax matters relating to establishment of a closed-end investment fund/personal fund, transfer of assets to such fund, generation of income, taking account the corporate restrictions and tax law amendments effective as of January 1, 2025;

a Russian high net worth individual on tax aspects of establishment of a personal fund in the Russian Federation, transfer of assets to such fund, and tax consequences of allocation of assets among the beneficial owners;

a Russian investment fund's managing partner on the investment program tax structuring matters, including establishment of an SPV, execution of convertible loan agreements, launch of a closed-end investment fund and payment of returns to individuals and legal entities.

Settlement of Tax Disputes

We advised:

the biggest pharmaceutical company in its disputes with the Russian customs authorities over a reduced 10-percent VAT rate on Russian imports of implant gels used in the beauty industry (Cases No. A40-215337/2024, No. A83-17672/2024);

a major fruit importer in a tax dispute over adjustment of sales revenues. Eventually, not only we managed to get a positive decision, but, also, create a legally binding precedent in respect of the transfer pricing methodologies in connection with the application of Article 54.1 of the Russian Tax Code (Case No. A45-25913/2023);

a taxpayer in a dispute following which a precedent was created in respect of the general three-year period of applicability of the VAT deduction to advance payments (Case No. A40-130974/2023);

a subsoil user in the pre-trial proceedings in a dispute over a Mineral Extraction Tax base calculation procedure in respect of the limestone used for the soda ash production. The tax authority revoked its over RUB 200,000,000 claim;

a taxpayer in a dispute over a Mineral Extraction Tax base calculation procedure in respect of the molding sand in the foundry industry;

a forwarding and logistics group in connection with a tax dispute over the alleged tax benefits generated from the interaction with troubled counterparties;

one of Russia's major agribusinesses in connection with the challenging of the cadastral value of over fifty land plots and recovery of the overpaid land tax in the amount of over RUB 100,000,000;

a leading mineral fertilizer producer in connection with a field tax audit over application of a reduced dividend tax rate under the applicable double tax treaty;

a Russian entity in connection with a field tax audit over propriety of the deductibility of interest under the floating-rate loan;

an individual subject in a desk tax audit in relation to the application of the individual income tax exemption to the sale of the high-price immovable property in connection with the expiry of the minimum holding period;

a major development company at a pre-trial stage of the tax dispute over the deductibility of interest under the cross-border project finance transaction of the value exceeding RUB 500,000,000;

one of the major pharmaceutical companies at a pre-audit stage of reclassification of marketing services as services subject to VAT;

a taxpayer in connection with drafting a defense file in relation to the beneficial ownership of dividends that allowed to exclude a potential hundred million tax assessment from the tax audit report;

a subsoil user in a dispute over the Mineral Extraction Tax in connection with the taxpayer's failure to account certain apatite-nepheline ore extraction expenses as taxable;

one of the biggest agricultural holding companies in property tax disputes relating to deductibility of the infrastructure assets (feed yards, substations, electricity transmission lines, roads, fences, drainage systems, etc.) from the property tax base;

a subsoil user in a dispute over the Mineral Extraction Tax in connection with the taxpayer's failure to account certain apatite-nepheline ore extraction expenses as taxable;

a Russian auto dealer in a landmark tax dispute in relation to the cross-border pre-IPO makeover; the claim exceeded RUB 2,000,000,000;

a company at the pre-audit stage with regard to eligibility of deductibility of costs and VAT amounts in connection with the outstaffing services provided by the recruitment agency;

a subsidiary of the U.S. tool manufacturer in connection with a tax audit of VAT refunds in connection with cross-border payments for outstaffing services;