The Moscow court of the first instance agreed that foreign companies were managed from Russia. OOO “ONEXIM Group” has accrued VAT of 332 million rubles (also a fine of 46 million rubles and a penalty of 123 million rubles) in relation to consulting services provided by the company to foreign entities of the group in 2013, 2014, 2015. The tax authorities considered that the place of provision of these services was the territory of the Russian Federation.
The issue of tax residency and taxation of profits of these foreign companies was not raised. It is possible that these companies had insignificant profits. It is also possible that the tax authorities did not want to limit themselves to claims only until 2015 from which new complicated rules for tax residency of legal entities apply as it is easier for them to collect VAT from the Russian taxpayer.