Moscow Buildings with a Cadastral Value Tax Base Listed

06.12.2013

Legal Update No. 441, 6 December 2013

Goltsblat BLP advises that the Moscow Government has adopted Resolution No. 772-ПП of 29 November 2013 “On Determining the List of Real Estate Properties with the Tax Base Calculated as their Cadastral Value for 2014” (the “Resolution”). The Resolution has been posted on the Moscow Government official website: https://www.mos.ru/documents/?id_4=131512

The Resolution approves the list of 1 842 real estate properties in Moscow, specifying their addresses and cadastral numbers. Pursuant to article 378.2 of the Russian Tax Code coming into effect on 1 January 2014, the cadastral value of these properties will be taken as their tax base.

As you might recall, under article 378.2 of the Russian Tax Code, Russian constituent entities may establish the specifics for calculating the tax base for facilities used for administrative, business and trading purposes, facilities actually used to accommodate offices, as well as trading, catering and domestic service facilities, on the basis of their cadastral value.

The relevant specifics for calculating the tax base on the basis of the cadastral value in Moscow have been introduced by Moscow City Law No. 63 of 20 November 2013 “On Amending Moscow City Law No. 64 of 5 November 2003 “On Corporate Property Tax””. Under the Law, in 2014, the property tax rate for properties with a cadastral value based tax base will be 0.9%.

Facilities used for administrative, business and trading purposes, facilities actually used to accommodate offices, as well as trading, catering and domestic service facilities that have not been included on the List approved by the Resolution for 2014 should be on the relevant list to be agreed for the next tax period. Until listed, these facilities are subject to property tax on the basis of their residual value in the usual manner.

If any parties concerned do not agree with a relevant property being included and (or) not included on the list, as per clause 2 of the Resolution, they may file an application with the Moscow State Inspectorate for Control over Use of Real Estate Property requesting that such a property be checked for compliance with its actual use until 18 December 2013. The check results may serve as grounds for amending the Resolution or changing the type of permitted use of the relevant property.

The Resolution listing real estate properties for 2014 with a cadastral value tax base comes into effect on 1 January 2014.

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