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Ministry of Finance might allow retailers not to pay taxes for stolen goods

 
02.11.2012

According to Vedomosti, the Ministry of Finance might allow retailers not to pay taxes on stolen goods. However, companies will be allowed to write off not more than 0.5% of revenues.

The proposed income tax exemption of 0.5% sales to cover stolen goods is below both the previously announced 1% and retailers’ expectations. Industry experts estimate the real value of stolen goods at 1%, meaning that the proposed amendments cover only part of the losses.

Nevertheless, we welcome the development, given that companies do not currently avail themselves of a tax exemption for stolen goods: the filing process and the approval agency have not been explicitly defined, so it makes no sense (from the bureaucratic point of view) applying for an exemption. As the new tax code would only require the approval of independent auditors (rather than having to file with the police, as at present), the process would be eased significantly.

Maria Kolbina, Ivan Kushch, Nikolay Kovalev, Zlata Kryvichkina
VTB Capital analyst

Tags:
Russia

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