Baker Tilly in Russia

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Baker Tilly's victory in the tax dispute in the case of "The Department (UK) Ltd" over the right to apply the 0 VAT rate granted to FIFA service providers. 

On August 30, 2021, the Arbitration Court of the Moscow District upheld the judicial acts in case No. A40-156311/2020. The project team, led by leading lawyer Revaz Chitaya, developed a legal position that made it possible to prove the illegality of the tax authority’s decision, reimburse VAT amounts from the budget of the Russian Federation, as well as to recover interest from the tax authority for late VAT refund.

The uniqueness of the case is expressed in the controversial norm – the VAT benefit provided to stimulate and support the holding of the World Cup Russia 2018. Thus, the dispute arose due to a different interpretation of the norm of subparagraph 13 of paragraph 1 of Article 164 of the Tax Code of the Russian Federation, which establishes a 0 VAT rate in respect of operations for the purchase of goods (works, services) by suppliers of goods (works, services) of FIFA. According to the tax authority, only FIFA Contractors (persons named in the list of FIFA counterparties, approved by the Organizing Committee "Russia-2018") had the right to apply this rule.

Baker Tilly managed to convince the courts of the illegality of this approach, applying, among other things, the general principles of tax law, consistently explained by the Supreme Court of the Russian Federation. 

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