Media & Resources
The RF Supreme Court invalidated tax reductions by transferring part of the business to affiliates enjoying tax benefits.
DATE: December 11, 2015 | AUTHOR: atlawyers
The RF Supreme Court invalidated tax reductions by transferring part of the business to affiliates enjoying tax benefits. On resolving a tax dispute case, the RF Supreme Court considered that the individual entrepreneur was indirectly controlled by the company, it was the only source of its income, they created fictitious document flow for distribution of proceeds in order to minimize taxes. The Court decided that the scheme had no real business purpose and economic substance, therefore the entrepreneur’s revenue is deemed revenue of the company and should be subject to corporate tax and VAT.