How to register a management company at the location of a CIT.
Legal Update No. 246.
Goltsblat BLP advises of the publication of Letter of the Federal Tax Service of 23 May 2011 "On registration of management companies of closed-end unit investment trusts with the tax authorities and on filing of tax declarations (calculations) for corporate property tax and land tax”.
Since 1 January 2011, the property of unit investment trusts (UITs) has been subject to property and land tax. The Tax Code of the Russian Federation makes the management company responsible for accruing the property tax of a UIT and paying it out of the UIT’s assets (articles 378 and 388 of the Russian Tax Code).
In a number of previous letters, the Ministry of Finance of the Russian Federation explained that it considered the taxpayer for property and land tax on a UIT’s property to be the management company (MC), which should register with the tax authorities at the location of the UIT’s real estate in order to fulfil taxpayer obligations (see, for example, Ministry of Finance letter of 17 May 2011 No. 03-05-05-01/30).
In its letter, the Federal Tax Service of the RF explains the procedure for an MC to undergo tax registration at the location of the UIT’s property, specifically that such registration is carried out on the basis of an application from the MC. Attached to this must be a copy of the rules for trust management of the UIT and a state registration certificate of the common shared ownership rights of the owners of the investment units.
Also clarified is the procedure for tax registration of an MC managing a UIT for items of artistic value, the information on such an MC being recorded by the tax authority at the location of the MC.
In addition, the letter under discussion makes recommendations for an MC on completing property and land tax declarations.
The Russian Tax Code still has not determined the status of an MC (taxpayer or tax agent), as was noted in our Legal Update No. 201 of 6 December 2010. The outstanding contradictions and ambiguities might provide grounds for questioning whether the amendments made to the Russian Tax Code by Federal Law of 27 November 2010 No. 308-FZ are actually constitutional.
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