Tax support for IT-business

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Client was considering the possibility of separating the IT function from the management company structure within the Group into a separate legal entity. In this regard, the Client was interested in analysing (1) the corporate structure of the Group for risks of claims related to the "split" of the business; (2) the business contracts of the newly established IT Company for compliance with the requirements of tax legislation in terms of the application of tax benefits for IT companies.

• Result

  In the course of the project implementation Tax Compliance specialists: (1) conducted a comprehensive analysis of interaction between the Group and IT-companies and prepared proposals for adjusting the corporate structure in order to reduce risks in terms of "splitting" the business; (2) developed proposals for adjusting the provisions of the agreement in order to ensure its compliance with the requirements of tax legislation in terms of applying tax benefits for IT-companies.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  A client provides IT services for a parent company. The company believed that the IT services provided to the parent organisation may not comply with the provisions of the Russian Tax Code for the application of tax exemptions. The company contacted Tax Compliance in order to assess the possibility to apply tax exemptions.

• Result

  The Tax Compliance team as a result of the project: (1) analysed the client's intercompany agreements to determine the validity of tax exemptions for IT companies; (2) developed proposals to adjust agreements and primary documentation to ensure their compliance with tax legislation.

Analysis of the client's business structure for the possibility of applying the tax benefits provided for in the IT maneuver

• Purpose

  The Tax Compliance team had the task of analyzing certain types of business transactions for the possibility of applying VAT and income tax benefits.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  Analysis of individual business transactions for their compliance with the conditions for the application of VAT exemption and accounting for the purpose of 90% threshold of income from IT-activities was carried out.

• Result

  Based on the results of the analysis, Tax Compliance team has come to the conclusion that the business operations of the client comply with the conditions stipulated by Articles 149 and 284 of the Tax Code of the Russian Federation; recommendations on the improvement of the internal document flow in the company have been prepared as well. As a result, the client decided to start applying the tax benefits provided for by the IT maneuver.

Recommendations were prepared for the client regarding the procedure for separating the IT-function within the Group, and the tax risks associated with such a reorganization were analyzed.

• Purpose

  The client decided to separate the IT function within the Group into a separate organizational structure. Our team was tasked with determining the tax treatment to be applied by the new IT company, as well as preparing recommendations to mitigate tax risks that could arise in connection with the reorganization.

• Employee involved

  Nikita Zharov

• Process description

  As a result of the analysis, the team prepared recommendations for the client on the most appropriate tax regime for the new structure, as well as developed proposals aimed at managing the tax risks associated with the reorganization.

• Result

  As a result of the analysis, the team prepared recommendations for the client on the most appropriate tax regime for the new structure, as well as developed proposals aimed at managing the tax risks associated with the reorganization.

Settled a dispute with the tax authority regarding the economic feasibility of expenses in the form of agency fees

• Employee involved

  Nikita Zharov

• Process description

  The Company purchased agency services aimed at attracting new clients. The tax authority concluded in its pre-inspection analysis that the Company's expenses for the acquisition of the above services were economically unjustified and should not be taken into account for profit taxation purposes.

• Result

  The team prepared a legal position substantiating the economic necessity of engaging agents and represented the client in meetings with the tax authority. As a result of the pre-inspection analysis, the tax authority accepted a significant part of the Company's arguments.