Requalifying consulting services as property management services performed in Russia
In this report, we would like to draw your attention to the provision of services to foreign companies when such services have signs of both consulting services and property management services. There has recently been a dispute with tax authorities on how to qualify these type of services. The taxpayer (a Russian company providing such services) lost its first court case and the parties are currently appealing the decision. In the course of the trial, the tax authorities proved that the services provided by the Russian company were property management services, and therefore the exemption set by Article 148.1 of the Russian Tax Code (RTC) could not be applied for VAT purposes (in other words, Russian VAT must be paid).