AGP Lawyers Have Successfully Protected a Taxable Person’s Interests in a Precedent-Setting VAT Dispute

The Commercial (Arbitrazh) Court of Moscow has ruled illegal a tax authority’s decision to reinstate the VAT paid as a part of the price of premises which are used for conducting both VATable and non-VATable operations.

The taxable person claimed VAT credit for the cost of premises that had been purchased for further lease, based on the proportion between VATable and non-VATable operations, which proportion was calculated as of the time of declaring the VAT for deduction. The tax authority considered that there were no grounds for application by the taxable person of provisions on a one-off prorated VAT deduction and required the claimed VAT credit being reinstated during a ten-year period.

The Court held that the taх authority’s arguments were inconsistent with the Russian Tax Code and invalidated its unfavorable decision rendered with respect to the taxable person. The taxable person was represented by AGP Attorneys Valentin Moiseev, Olga Zelenskaya, and Senior Lawyer Evgeny Kalinin.