On January 13, 2021, the Supreme Court of the Russian Federation considered a dispute, represented by Taxology lawyers.
The subject of consideration was the issue of the use by leasing companies of an increased thin capitalization ratio of 12.5. Let us remind you that clause 2 of Art. 269 of the Tax Code of the Russian Federation until 2017 allowed the use of an increased thin capitalization ratio to organizations "exclusively engaged in leasing activities."
The tax authorities and courts interpreted this condition literally, refusing to apply a capitalization ratio of 12.5 to leasing companies on the grounds of receiving any income other than lease payments. In the considered dispute, the tax authority and lower courts recognized the receipt of a commission for organizing leasing agreements, payments for the sale of equipment in installments (purchase and sale), interest income on deposits and loans, and sublease as “non-leasing activities”.
According to Taxology, this approach unreasonably narrows the leasing activity to the receipt of only one of the possible incomes – lease payments. However, the law on leasing allows you to receive other income from related contracts and additional services and works. In addition, any actually functioning leasing company may inevitably receive other incomes due to the implementation of leasing activities.
At the same time, is it correct to assert that the receipt of such accompanying income affects the marketability of attracted financing and requires an adjustment of tax liabilities using a coefficient of 3 instead of 12.5? After all, an increased thin capitalization ratio has been established for leasing companies by the legislator, taking into account the objective characteristics of leasing, which, along with banking activities, is associated with the need to attract large volumes of financing. For leasing companies, the debt-to-equity ratio of 12.5 has been recognized by the legislator as reasonable, market-based and does not require any adjustments for tax purposes.
According to Taxology, the interpretation of paragraph 2 of Art. 269 of the Tax Code of the Russian Federation is formal and distorts the very essence of the rule, the purpose of establishing a special thin capitalization ratio for leasing companies, violates the principle of economic foundation and equality of taxation.
The Supreme Court of the Russian Federation recognized such arguments deserving of attention and canceled the completed judicial acts in full. The interests of the taxpayer in this dispute were represented by Taxology advisor Svetlana Samokhvalova.
Congratulations on the victory to our colleagues, the client and all taxpayers for whom this decision of the Supreme Court will be significant in their activities.