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29 July 2021
Tax Messenger
Tax Edition
Round-up of developments in case
law regarding the inclusion of
licence fees and dividends in the
customs value of imported goods
On 23 July 2021, the Bryansk Province Arbitration Court
International Tax Review issued a ruling on case No. A09-1129/2021 involving Pull and
ranked EY Russia Tax & Law Bear CIS LLC (“the Company”) in which decisions made by the
practice as a leading tax firm Bryansk customs office to adjust the customs value of
(Tier 1) in Russia in its annual imported goods by including amounts of licence fees and
World Tax guide for 2018.
dividends were declared unlawful. It should be noted that a
similar decision was made on case No. A09-1751/2021
involving Bershka CIS LLC, which is likewise a company of the
Inditex group. See our earlier round-up for more details about
that case.
Licence fees
The above-mentioned companies have a similar licensing
structure and are parties to a franchising agreement under
which rights are granted to use (1) a trademark and (2) know-
how, software, a website and a trade name (“other IP assets”).
The Company includes the licence fees for the use of the
trademark in the customs value of imported goods. The
customs authority then decided that fees for the use of the
other IP assets should also be included in customs value.
As in the last ruling, the court took the How can EY help?
Company’s side and reiterated that the rights to
Assessing risks of additional amounts
the other IP assets were not directly related to
being included in the customs value of
the goods since they were not used in
goods.
manufacturing the goods and did not form part
of them; rather, they served to give the Preparing arguments (a legal defence) for
enterprise a distinct identity and were used in the non-inclusion of additional amounts in
organizing its business activities. the customs value of goods or deductions
from customs value.
Dividends
Obtaining a private letter from the EEC
There have been further positive case law
confirming that dividends should not be
developments for foreign trade companies on
included in the customs value of goods.
the issue of the non-inclusion of dividends in the
customs value of imported goods. On 12 July Confirming customs value (preparing
2021, the Moscow Arbitration Court issued a replies to requests from customs
ruling on the case involving Chanel LLC in which authorities, preparing arguments and draft
it invalidated decisions of the Moscow customs documents).
office requiring dividend payments to be Appealing against decisions of customs
included in the customs value of imported authorities on customs value to higher
goods. See our earlier round-up for more details customs authorities and courts.
about that case.
Notably, in ruling on the Company’s case the
court also took into consideration the conclusion Authors:
drawn in a report of the Technical Committee on Wilhelmina Shavshina
Customs Valuation (Case Study 2.2 Treatment of Ksenia Sizova
Proceeds under Article 8.1. (d)), which stated Daria Lebedeva
that, in determining customs value, it is essential
to distinguish clearly between income (proceeds)
from the subsequent sale or other disposal of
imported goods and dividends or other
payments from the buyer to the seller that do
not relate to the imported goods.
For more information, please contact the authors of this publication:
Wilhelmina Shavshina Ksenia Sizova
+7 (921) 940 2261 +7 (921) 951 0973
Wilhelmina.Shavshina@ru.ey.com Ksenia.Sizova@ru.ey.com
2Inquiries may be directed to one of the following executives:
Moscow
International Tax and Transaction Services
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Maxim Maximov +7 (495) 662 9317
Financial Services
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Irina Bykhovskaya +7 (495) 755 9886
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Alexei Kuznetsov +7 (495) 755 9687
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Tax Technology
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For information about Foreign Countries Business
centers in EY Moscow office please follow the link.
Customs & Indirect Tax
Vadim Ilyin +7 (495) 648 9670
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a
substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the g lobal
Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of
any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
© 2021 Ernst & Young Valuation and Advisory Services LLC
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