Instructions of the Federal Tax Service on the Application of the Provisions of Article 54.1 of the Tax Code of the Russian Federation


The Federal Tax Service sent a letter dated 10.03.2021 N BV-4-7/3060@ to the territorial tax authorities, concerning, in particular, issues of countering tax avoidance and obtaining unjustified tax benefits (hereinafter – the “Letter of the Federal Tax Service”).

The Letter of the Federal Tax Service, in particular:

  • recognizes the taxpayer’s right to tax reconstruction (i.e. additional tax assessment in a “fair amount” taking into account the actual costs incurred on a transaction recognized as fictitious);
  • indicates criteria for evaluating transactions (in particular, the performance of the obligation by the proper person, reality, main goal, due legal qualification of transactions, correct application of special tax regimes).

Taking into account the provisions of the Letter of the Federal Tax Service, it is recommended to exercise commercial prudence when choosing counterparties, check whether the suppliers are bona fide (conducting a research according to the procedures established within the buying company, not limited to only formal collection of evidence), carefully document information about counterparties, avoid transactions with the primary purpose of tax savings.