The courts refuse to charge customs additional fees for the import of goods by including in their cost the amount of dividends paid abroad. Deloitte, as well as the Association of European Businesses (AEB; represents the interests of foreign business in Russia), drew attention to the increasingly frequent attempts of the FCS to overcharge the price of imported goods, and ultimately the amount of import VAT and duties. But so far the court practice is developing in favor of business. A subsidiary of the European company Pull & Bear, Pull & Bear CIS LLC (90% owned by Zara Holding BV) successfully challenged the additional accruals in the court of first instance, it follows from the materials in the file of arbitration cases.
The Russian representative office imported clothing and footwear for subsequent sale in chain stores and distributed the profit in the form of dividends to foreign founders. After the inspection, the Bryansk customs increased the customs value of the imported goods by the amount of dividends and additionally collected import customs duties and VAT from them. The customs office justified its decision by the fact that the entire business of the company consists in the sale of goods received from the parent company, therefore, dividends are associated with imported goods. The company objected that dividends “based on their economic and legal nature can not be either part of the price of the goods sold, or the seller’s income from the subsequent sale of goods on the domestic market, and therefore should not be included in the customs value.”
The court of first instance ruled that the customs decisions were illegal, and the conclusion that dividends were part of the value of imported goods was “not based on the current customs, tax and civil legislation.”
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