The Russian customs authorities have recently started challenging royalty/license fee agreements of number of companies.
According to the media and official comments of the Federal Customs Service of Russia (FCS), the customs authorities have charged significant amounts of additional customs duties and initiated a criminal case against a large retailer in Russia for not including certain royalties in the customs value of goods.
Recently, the FCS announced that about 40 companies are on their ‘target list’, although information about this list is unavailable.
Customs authorities initiates number of customs audits towards companies having royalty/license fee agreements, to check the dutiability of such agreements.
Bearing in mind that under the law, the underpayment of customs duty and VAT for 25k euros and more may lead to criminal investigations, proper preparation for such audits and careful management are highly recommendable
It is therefore the right time to revisit royalty/license fee agreements and elaborate defending arguments to sustain the non-inclusion of certain royalties or license fees in the customs value of imported goods.
For further information or in case of any questions, please contact Ekaterina Rassadkina, Ekaterina.Rassadkina@pwc.ru.
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