The Russian practice of Berwin Leighton Paisner
(BLP), an award-winning international law firm
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Tax consulting / tax litigation

Russia Tax Firm of the Year 2017
European Tax Awards | International Tax Review

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Goltsblat BLP gives proactive and straight-to-the-point tax advice and has a strong grasp of tax litigation intricacies and formalities

Legal 500 EMEA 2015

Transactions

Advised X5 Retail Group NV listed in London on tax and corporate aspects of cross-border restructuring of the group’s IP and real estate assets. The advice covered multi-jurisdictional issues (including the respective domestic laws of a number of European jurisdictions) and the possible implications from the Russian law and case law standpoint. more deals

Advised OAO RusHydro on “de-offshorization” of the holding structure for the BEMO (Boguchany Dam) project in the context of partnership with UC Rusal and cross-border tax implications of the proposed restructuring.

Performed due diligence and advised on possible acquisition of a leading retail chain by a Russian mobile operator, uncovering more than 20 tax risks that provided the buyer with additional bargaining power in the negotiations.

Developed the sales (commercial0 policy for a major global consumer packaged goods company (with Russian sales in excess of USD 500 m) to support the discount/ bonus policy to provide an additional layer of defence against disputes with tax or antimonopoly authorities.

Helped the Russian division of a leading global consumer packaged goods company in designing a tax-efficient structure of their advertising, promotion and distribution activities in Russia. Our advice covered the adaptation of distribution agreements, structuring of the distribution of point-of-sale materials (POSM) and justifying a no-VAT status of bonuses paid to retailers, as well as the transition to new types of arragements (e.g. services) following introduction of the Trade Law, covering more than USD 1 bn in sales, both to key accounts (retail chains) and major distributors.

Helped the Russian division of a leading global consumer packaged goods company in designing a tax-efficient structure of their advertising, promotion and distribution activities in Russia. Our advice covered the adaptation of distribution agreements, structuring of the distribution of point-of-sale materials (POSM) and justifying a no-VAT status of bonuses paid to retailers, as well as the transition to new types of arragements (e.g. services) following introduction of the Trade Law, covering more than USD 1 bn in sales, both to key accounts (retail chains) and major distributors.

Performed due diligence and developed a structure for acquisition of a leading pharmaceuticals distributor by a major global private equity fund, including developing a tax efficient structure for disposal of the non-core assets prior to the acquisition.

Assisted in developing a tax-efficient structure for acquisition of US assets by a leading Russian steel producer, justifying application of favourable merger-linked US tax treatment for the transaction.

Developed a tax efficient structure for a leveraged buy-out of a major player on the outdoor advertising market by a major global private equity fund, this allowing the bidder to come up with a more competitive tender bid.

Coordinated due diligence in several European jurisdictions and developed an acquisition and post-acquisition management structure for a group of Russian investors acquiring a major shipbuilding company in Europe.

Advised on possible acquisition by a leading global food manufacturer of a leader on the Ukrainian market.

Advised private shareholders of a leading Russian regional retail chain on structuring the chain’s sale to a strategic investor in a way that both managed the family issues of one of the shareholders and minimised the tax liabilities of the other shareholder through taxable gain deferral.

Proposed significant amendments to the tax section of an SPA between two major Russian telecommunications companies suggesting the right level of tax warranties and indemnities to be written into the SPA, substantially improving the level of protection of the buyer against tax risks as compared to the initial draft put forward by the seller.

By suggesting appropriate wording for an SPA, provided the buyer with formal grounds for avoiding payment of withholding tax on top of the acquisition price on an acquisition in Kazakhstan.

Ongoing tax assistance

Performed a Russian transfer pricing study, localised and implemented the European TP Policy and prepared TP documentation package for PUIG RUS LLC, Russian distributor of the Spanish-based fragrance and fashion group more deals

A European cement manufacturer - extensive tax and customs support and advice on the structuring of the EUR 100m+ construction for a new manufacturing facility in Kaluga, Russia including support in negotiations and in drafting of the construction contract with the supplier.

One of the biggest multinational manufacturers of float glass and fabricated glass products - drafting documentation securing local tax concession for expansion projects in two Russian regions.

Mars - extensive ongoing tax assistance to  and their Russian subsidiaries in relation to their distribution activities in Russia aimed at tax-efficient structuring of the client’s advertising, promotion and distribution activities in Russia, including adaptation of distribution agreements, structuring of the distribution of point-of-sale materials (POSM) and justifying a no-VAT status of bonuses paid to retailers.

Assisted a foreign investor in recovering more than RUB 50 m of input VAT in cash on a purchased building without the need for formal tax ligitation.

Developed guidelines for a Russian subsidiary of another major global consumer packaged goods company aimed at minimising its non-deductible expenses; by following the guidelines, the Russian subsidiary ultimately saved more than US$ 4mln in profit tax.

On short notice performed a due diligence on a property development company acquired by the client, allowing the buyer to negotiate significant concessions over the initial terms.

Advised a Russian division of a leading professional services firm on reducing its non-deductible expenses by introducing additional supporting documentation; implementation of the recommendations should allow it to save more than US$ 1mln in profit tax.

Helped adapt numerous cross-border agreements on provision of services to Russian subdivisions of international corporations to the requirements of the Russian tax legislation, this including development of the extensive supporting documentation required under Russian tax law and practice.

Developed a mechanism enforceable under Russian law linking payment for an asset to the actual recovery of VAT incurred on that asset by the buyer.

Developed a tax-efficient mechanism for sharing premises-related costs between several entities of an oil services company, thereby allowing it to achieve a substantial reduction in its unrecoverable input VAT.

Developed, for a major foreign retailer, a tax accounting system for losses incurred due to shortages of goods and spoilage of goods during storage. The system enabled the writing off, for profit tax purposes, of any losses due to shortages and spoilage within set limits, including ones not directly related to normal wastage.

Assisted several leading retailers in developing and implementing a tax-efficient reorganisation aimed at segregating real estate and retail operations and consolidating real estate.

Identified serious tax and regulatory risks in the operating model of several multinational companies distributing cosmetics products in Russia under a direct sales model; suggested alternative models, tailored to the needs of each individual client, that minimised the tax and regulatory risks and increased business efficiency.

Tax litigation

A Russian project company of a major European property developer - complex tax litigation claiming more than USD 20 mln in VAT that was refused for recovery by the tax authorities based on. more deals

One of the biggest retailers of home furnishing products  - defending in a tax case aimed at recovering input VAT on what the tax authorities claimed to be a “bad faith” supplier - an area where the courts tend to favour the tax authorities.

Defended the no-VAT status of bonuses received by a local distributor of a major global consumer packaged goods company.

Developed an innovative tax litigation approach that allowed a Russian subsidiary of a major global retailer to recover input VAT on what the tax authorities claimed to be a “bad faith” supplier - an area where the courts tend to favour the tax authorities.

Assisted a global medical product manufacturer in designing a sustainable structure for its operations on the Russian market following the potential introduction of margin limitations on some of its products sold on the Russian market.

By actively pursuing recovery of court-related expenses, convinced a local tax office to drop some claims against a Russian division of a leading global automotive manufacturer. Developed a tax strategy for optimal tax treatment of vehicles returned by customers directly to the importer under the provisions of the Consumer Protection Law, and helped structure the provision of an extended warranty in a tax efficient way.

Drafted a commercial policy for discounts and bonuses to dictributors and other buyers for a leading Europe medical products manufacturer and adatated in to the specific needs of the company's buisness, as well as ensuring compliance with antimonopoly and tax legistation.

Planned and performed an in-depth due diligence, structured the acquisition and negotiated key tax terms of the share-purchase agreement in connection with acquisition by a major global commercial truck manufacturer of a stake in a key Russian truck producer.

Assisted in developing an innovative tax litigation approach that allowed a Russian subsidiary of a major global packaging manufacturer to recover input VAT on zero-rated supplies with provision of minimal supporting documentation.

Developed an innovative tax litigation approach that allowed a Russian subsidiary of a major global logistics operator to recover input VAT that was recorded in a tax return in a later tax period.

Defended recovery of input VAT related to subsidies received from the Government to reimburse losses arising as a result of applying government-administrated prices.

Supported in court the use of a simplified set of supporting documentation for claiming VAT exemption on reimbursement of warranty-related expenses by a major distributor of foreign cars in Russia; this allowed the client to continue saving on warranty-related administration costs.

Defended a production sharing agreement (PSA) operator in court on a dispute with the local tax authorities, allowing the operator to deduct all the costs on the PSA list, which is wider than the list of costs in the Russian Tax Code. Previously, the tax authorities had insisted that only the operator’s costs meeting the requirements provided for by the Tax Code were deductible.

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Evgeny Timofeev
Partner, Head of Tax Practice
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