Legal support of tax monitoring
Situation
Infralex are providing the leading telecommunication operator in Russia, with complex tax consulting, including support in the special matters concerning taxation of digital services, satellite communications services, applying tax relieves for IT companies as well as some test cases (like VAT changing) influencing for the Russian telecommunication market with total value RUR 15 bln+.
Actions taken
Infralex has been rendering complex tax consulting services for the leading telecommunication company in Russia and affiliated companies since 2014. Infralex is also deeply involved in the client`s tax monitoring process.
Extensive development of the client’s business in the digital economy gave rise to a number of urgent tax matters that Infralex opined on in 2018-2019, such as taxation of digital services, satellite communications services, applying tax relieves for IT companies.
In the course of 2018-2019 Infralex tax team was also drafting requests for official opinion on different tax matters addressed to tax authorities conducting tax monitoring of the client’s activity and participated in communication with them. The client’s views on respective tax matters based on Infralex opinion were mostly sustained by tax authorities.
Advice by Infralex on tax issues relative for majority of telecom companies (e.g. consequences of Russian VAT tax rate increasing) was taken into account by the client in coming to certain business decisions, that affected Russian telecommunication sector.
Result
As a result of the work done, the total amount of taxes on an annualized basis, paid by the client, decreased in 2018 compared with the previous period by about 20% with an increase in the volume of client`s activity.