Tax. Goltsblat BLP is the Russian practice of Berwin Leighton Paisner (BLP), an award-winning international law firm

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1 Tax Goltsblat BLP is the Russian practice of Berwin Leighton Paisner (BLP), an award-winning international law firm

2 The lawyers are very energetic and really understand the client s issues; the Goltsblat BLP tax practice is one of the best in Russia. Chambers Europe 2015

3 Tax Practice / 03 Evgeny Timofeev Partner, Head of Russian/CIS Tax Practice Berwin Leighton Paisner (Goltsblat BLP) Russian Tax Practice focuses on identifying unrecognised issues and designing solutions to difficult strategic corporate tax, VAT, customs and personal wealth challenges. Our clients include Fortune 500 and FT500 companies that are household names (such as Mars, Kimberly-Clark, Shell, ABB and many other similar organisations), as well as large and medium Russian privately held companies, successful entrepreneurs, and families with a net worth of eight to ten figures. We work with strategic tax issues that may have a material impact on the bottom line. This includes helping clients realise greater value by focusing on: Maximising business income by helping clients increase their profit and improve their cashflow through optimal tax planning; Maximising value in a transaction by helping clients minimise the negative impact of taxes on the transfer of cash and assets in a transaction; Defending taxpayers against Tax and Customs authorities, starting from development of a defence strategy to representation during the appeal procedure and in Russian courts; Designing and revising corporate structures to manage transfer pricing issues and minimise the negative impact of taxes on business growth; Preserving and enhancing personal and family wealth by helping clients protect their assets, assisting with succession planning or selling their business. We always aim to achieve a significant payback that would cover the client s investment in hiring us many times over. As any Russian tax practitioner knows, tax litigation is an inevitable element of the Russian tax landscape. Russian tax authorities are notorious for having a fiscal focus during tax audits, with more than 90% of field audits resulting in an assessment. By extensively validating the conclusions through the relevant court practice, as well as addressing antimonopoly and civil law issues when necessary, we stand by our recommendations. If necessary, we will passionately defend the position in Russian courts. Our practice attorneys have won well over 1,000 case. Another significant differentiator is a strong customs team advising clients on the international trade puzzles created by Russian and the Russia/Kazakhstan. Belarus Unified Economic Territory s legislation. The practical solutions offered by the customs lawyers are based on the profound experience and an outstanding track record in tax and customs litigation.

4 04 / Tax Practice On the international side we are supported by about 100 tax lawyers working from our London (which has the largest tax practice among City law firms), Paris, Brussels, Singapore and Abu Dhabi offices, as well as by our own Zurich-based trust services firm (Paicolex). This provides a unique proposal for supporting Russian clients in designing and implementing efficient corporate and personal ownership structures and funds aimed at attracting foreign investment into Russian assets. In addition to our own team of legal professionals, we also work closely with more than 60 law firms from 40 different countries, including all the key tax jurisdictions relevant for Russia-related transactions, such as the Netherlands, Luxembourg, Switzerland, Cyprus and many others. top tier firm in tax litigation. #1 Legal 500 Tax practice of Goltsblat BLP for several years has been top-ranked / highly recommended by major international legal directories, such as The Legal 500 EMEA, Сhambers & Partners, World Tax Review, Best Lawyers and others. In 2015 the Tax practice Goltsblat BLP has been shortlisted for the Russia Tax Firm of the Year award (International Tax Review European Tax Awards). Evgeny Timofeev has been ranked in Band 1 by Chambers & Partners for several years now, making him one of the four most recommended Russian tax lawyers.

5 Tax Practice / 05 EXAMPLES OF CLIENT RESULTS ACHIEVED BY OUR TAX EXPERTS Owing to the sensitive nature of tax projects, we observe a strict code of confidentiality and, as a general rule,do not disclose client names or any other specific information on tax-related projects. For these reasons, the following examples are necessarily general and are provided solely to illustrate the nature of our work and experience. They are not intended to guarantee that similar results can be achieved in future engagements. In our experience, every client situation is unique, and it is impossible simply to duplicate or copy a prior strategy or outcome. Maximising business income LEADING GLOBAL CONSUMER PACKAGED GOODS COMPANY ANOTHER MAJOR GLOBAL CONSUMER PACKAGED GOODS COMPANY RUSSIAN SUBSIDIARY OF ANOTHER MAJOR GLOBAL CONSUMER PACKAGED GOODS COMPANY Helped the Russian division of a leading global consumer packaged goods company in designing a tax-efficient structure of their advertising, promotion and distribution activities in Russia. Our advice covered the adaptation of distribution agreements, structuring of the distribution of point-ofsale materials (POSM) and justifying a no-vat status of bonuses paid to retailers, as well as the transition to new types of arrangements (e.g. services) following introduction of the Trade Law, covering more than USD 1 bn in sales, both to key accounts (retail chains) and major distributors. Developed the sales (commercial) policy for a major global consumer packaged goods company (with Russian sales in excess of USD 500 m) to support the discount / bonus policy to provide an additional layer of defence against disputes with tax or antimonopoly authorities. Developed a strategy and subsequent guidelines for a Russian subsidiary of another major global consumer packaged goods company (with Russian sales in excess of USD 1 bn) aimed at minimising its non-deductible expenses. By following the guidelines, the Russian subsidiary ultimately saved more than USD 10 m in profit tax. MAJOR GLOBAL AUTOMOTIVE MANUFACTURER LEADING EUROPE MEDICAL PRODUCTS MANUFACTURER Developed a tax strategy for another major global automotive manufacturer for optimal tax treatment of vehicles returned by customers directly to the importer under the provisions of the Consumer Protection Law, and helped structure the provision of an extended warranty in a tax efficient way. Drafted a commercial policy for discounts and bonuses to distributors and other buyers for a leading Europe medical products manufacturer and adaptated it to the specific needs of the company s business, as well as ensuring compliance with antimonopoly and tax legislation.

6 06 / Tax Practice ONE OF THE GLOBAL MEDICAL PRODUCTS MANUFACTURER OIL SERVICES COMPANY MAJOR FOREIGN RETAILER Assisted a global medical product manufacturer in designing a sustainable structure for its operations on the Russian market following the potential introduction of margin limitations on some of its products sold on the Russian market. Developed a tax-efficient strategy for sharing premises-related costs between several entities of an oil services company, thereby allowing it to achieve a substantial reduction in its unrecoverable input VAT. Developed, for a major foreign retailer, a tax accounting system for losses incurred owing to shortages of goods and spoilage of goods during storage. The system enabled the writing off, for profit tax purposes, of any losses due to shortages and spoilage within set limits, including ones not directly related to normal wastage. Maximising value in a transaction KEY GLOBAL TRUCK MANUFACTURER MAJOR GLOBAL PRIVATE EQUITY FUND MAJOR GLOBAL OIL COMPANY Planned and performed an in-depth due diligence, structured the acquisition and negotiated key tax terms of the sharepurchase agreement in connection with acquisition by a major global commercial truck manufacturer of a stake in a key Russian truck producer. Performed a due diligence and developed a structure for the acquisition of a leading pharmaceuticals distributor by a major global private equity fund, including development of a tax efficient structure for disposal of the non-core assets prior to the acquisition. Assisted a major global oil company in structuring a joint venture with a Russian partner in an exploration project on the Russian continental shelf. MAJOR GLOBAL PRIVATE EQUITY FUND MAJOR RETAILER ANOTHER MAJOR RETAILER Developed a tax efficient structure for a leveraged buy-out of a major player on the outdoor advertising market by a major global private equity fund, the structure allowing the bidder to come up with a more competitive tender bid. Developed a mechanism enforceable under Russian law linking payment for an asset to actual recovery of VAT incurred on that asset by the buyer. On short notice performed a due diligence on a property development company acquired by the client, allowing the buyer to negotiate significant concessions over the initial terms.

7 Tax Practice / 07 Defending Taxpayers against Tax and Customs authorities MAJOR INTERNATIONAL PROPERTY DEVELOPMENT COMPANY FOREIGN INVESTOR LOCAL DISTRIBUTOR OF A MAJOR GLOBAL CONSUMER PACKAGED GOODS COMPANY Defended the recovery of more than RUB 600 m of input VAT on construction-related services for a major international property development company that had been challenged by the tax authorities on the basis of alleged deficiencies at the subcontractor level. Assisted a foreign investor in recovering more than RUB 50 m of input VAT in cash on a purchased building without the need for formal tax litigation. Defended the no-vat status of bonuses received by a local distributor of a major global consumer packaged goods company. RUSSIAN SUBSIDIARY OF A MAJOR GLOBAL PACKAGING MANUFACTURER RUSSIAN SUBSIDIARY OF A LEADING GLOBAL AUTOPRODUCER RUSSIAN DIVISION OF A LEADING GLOBAL AUTOMOTIVE MANUFACTURER Assisted in developing an innovative tax litigation approach that allowed a Russian subsidiary of a major global packaging manufacturer to recover input VAT on zerorated supplies with provision of minimal supporting documentation. Supported in court the use of a simplified set of supporting documentation for claiming VAT exemption on reimbursement of warrantyrelated expenses by a distribution subsidiary in Russia; this allowed the client to continue saving on warranty-related administration costs. By actively pursuing recovery of court-related expenses, we convinced a local tax office to drop some claims against a Russian division of a leading global automotive manufacturer. PRODUCTION SHARING AGREEMENT (PSA) OPERATOR Defended a production sharing agreement (PSA) operator in court in relation to a dispute with the local tax authorities, allowing the operator to deduct all the costs on the PSA list, which is wider than the list of costs in the Russian Tax Code. Previously, the tax authorities had insisted that only the operator s costs meeting the requirements provided for by the Tax Code were deductible. Its commercial approach is particularly valued by its clients. Chambers UK

8 08 / Tax Practice Designing tax efficient corporate structure MAJOR GLOBAL AUTOMOTIVE MANUFACTURER MAJOR GLOBAL AUTOMOTIVE MANUFACTURER SEVERAL LEADING RETAILERS Developed a reorganisation plan for a major global automotive manufacturer aimed at simplifying the Russian legal structure with minimal tax costs, whilst at the same time maintaining customs concessions. The proposed structure enabled the client to save several months and a lot of administrative hassle as compared to the structure that was originally contemplated by the client. Designed a detailed reorganisation strategy and the resulting step-plan for another major global automotive manufacturer aimed at simplifying the Russian legal structure that including accession of one entity into another, while maintaining local tax concessions. Assisted several leading retailers in developing and implementing a tax-efficient reorganisation aimed at segregating real estate and retail operations and consolidating real estate. RUSSIAN FASHION TRADING COMPANY FUND WITH THE OBJECTIVE OF INVESTING INTO RUSSIAN REAL ESTATE FUNDS LAUNCHED BY RBS ASSET MANAGEMENT, HADRIAN S WALL CAPITAL, THREE DELTA, DUET, ETC. Developed a plan for tax-efficient conversion of intra-group debt into equity, which required achieving optimal tax treatment in three jurisdictions. Designed a structure for a fund with the objective of investing in Russian real estate aimed at providing a relatively simple but robust vehicle to attract external investors (both Russian and foreign), whilst at the same time allowing the organiser of the fund to maintain control over the investment strategy and day-to-day operations of the Russian properties. Our London team has also designed and implemented numerous fund-type structures aimed at investing in real estate and debt instruments all over Europe and Asia, including but not limited to funds launched by RBS Asset Management, Hadrian s Wall Capital, Three Delta, Duet and many others. RUSSIAN PROPERTY DEVELOPMENT GROUP Developed a plan for tax-efficient unwinding of intra-group receivables as part of debt restructuring and refinancing.

9 Tax Practice / 09 Preserving and Enhancing Personal and Family Wealth PRIVATE INVESTORS IN A LEADING RUSSIAN REGIONAL RETAIL CHAIN GROUP OF RUSSIAN PRIVATE INVESTORS PRIVATE US INVESTOR Advised private shareholders of a leading Russian regional retail chain on structuring the chain s sale to a strategic investor in a way that both managed the family issues of one of the shareholders and minimised the tax liabilities of the other shareholder through taxable gain deferral. Designed and implemented an ownership structure for a group of Russian investors establishing a joint venture to invest in the Russian media industry. This involved establishing a trust in an English law jurisdiction and establishing holding companies to minimise tax leakage on potential dividend flows. Advised a US investor of Russian origin on the optimal structuring of the sale of his stake in a Russian business aimed at achieving optimal Russian personal income tax treatment of the sales proceeds. PRIVATE RUSSIAN INVESTOR Developed a tax-efficient strategy for consolidation of Russian agricultural assets prior to sale of a stake to a foreign strategic investor. PRIVATE RUSSIAN INVESTOR Designed and implemented the structure for sale of a Russian mobile phones retail business to a federal retailer and designed and implemented a subsequent personal ownership structure for the major shareholder aimed at maximising confidentiality and protection of assets. A sizeable team with a considerably elevated profile. Chambers UK INTERNATIONAL WEALTH STRUCTURING Our London team has also, for more than 40 years, been advising high net worth individuals and their families on all aspects of their personal and business wealth, including wealth structuring, tax planning, governance and family office issues, trusts, foundations, dispute resolution and tax and trust litigation. Over 100 of our high net worth clients and their families have continued to come back to us for over ten years. We also have extensive expertise in advising on the particular issues that arise for high net worth individuals who wish their wealth structuring to comply with Shari a law - in terms of succession, the obligations of the family and investments. We also design, establish and advise on philanthropic structures for wealthy families, through which they co-ordinate their international charitable giving.

10 10 / Tax Practice Tax Contacts Evgeny Timofeev Partner, Head of Russian/CIS Tax Practice Tel.: +7 (495) (Moscow) Evgeny.Timofeev@gblplaw.com Evgeny Timofeev is an important player on the market, advising on tax structuring mandates as well as maintaining an excellent reputation for representing clients in tax disputes. Clients suggest that he is good at providing the right arguments, and does so in a very artistic way, making him a brilliant and successful lawyer in terms of court practice. Chambers Global 2015 Michael Wistow Partner, Head of Tax Tel.: +44 (0) (London) Michael.Wistow@blplaw.com John Overs Partner, Head of Corporate Tax Tel.: +44 (0) (London) John.Overs@blplaw.com Jonathan Kropman Partner, Head of Trusts and Personal Tax Tel.: +44 (0) (London) Jonathan.Kropman@blplaw.com A pre-eminent name in the market, sources describe Evgeny Timofeev as having a brilliant mind, and say: He is very client-oriented and thinks of the needs of the client as if they were his own needs. Chambers & Partners Global 2014 Goltsblat BLP s sizeable group acts for international and Russian clients on the full range of tax matters. Evgeny Timofeev is renowned for his practical skills, litigation prowess and forward thinking. He is widely regarded as a real star of the market. Legal 500 EMEA 2013 Chambers Global 2012

11 The Russian practice of Berwin Leighton Paisner (BLP) GBLP representative client list* Abbott Laboratories Aker Solutions Alcoa Alfa Laval Potok Alfa-Bank Amgen AstraZeneca Aurubis AG Baker Huges Barclays Bank BASF Brunswick Rail Leasing 20th Century Fox Caterpillar Financial Chelyabinsk Pipe Rolling Plant China Development Bank Chrysler Coca-Cola Covidien Danone Dell Deutsche Bank AG EBRD Efes Estee Lauder Eurocement Group Ferronordic Machines Fleming Family & Partners Freight One GE Energy Geely International Corporation General Motors Guardian Hals Development Immofinanz AG ING Bank Inter RAO Jaguar Land Rover Japan Bank for International Cooperation (JBIC) Johnson & Johnson Kimberly-Clark Komatsu Kronospan Kvaerner Lafarge LG International Corp. 3M Russia Magna International Mail.ru Mars MasterCard Member Association McAfee Merck Metinvest Eurasia Metro Cash&Carry Russia Mitsubishi Electric Mitsubishi Motors Corporation Motion Picture Association of America (MPAA) NALCO / Ecolab Nichia Corporation Nike NIS GLONASS ( Navigation Information Systems) Nissan Russia Nokia Siemens Networks Nord Stream AG North Caucasus Development Corporation Novatek Oriflame Otkritie Bank Panasonic Peugeot Citroen Rus Philips Procter & Gamble Raven Russia RBK Money Reckitt Benckiser Reiffeisenbank Rolf Royal Canin RusHydro RUSNANO Russian Platinum Group Sandoz Sanofi-Aventis Sberbank Scania Schlumberger Scott Fetzer Company Shell Sheremetievo International Airport Sibur Sick AG Skolkovo South Stream Transport B.V SUEK (Siberian Coal Energy Company) Sukhoi Company TESCO Corporation TEVA Tommy Hilfiger Transnefteproduct UBS AG Unicredit Bank Unilever Rus United Grain Company (OZK) United Metallurgical Company (OMK) Universal Pictures Rus Uralkali VimpelCom Volkswagen Group VTB Capital Warner Bros. Entertainment X5 Retail Group * All names are disclosed with the clients permission Key facts about Goltsblat BLP: Goltsblat BLP is the Russian practice of Berwin Leighton Paisner (BLP), an award-winning international law firm headquartered in London and with offices operating in major commercial and financial centres throughout the world - Moscow, Abu Dhabi, Beijing, Berlin, Brussels, Dubai, Frankfurt, Hong Kong, Paris and Singapore. More than 100 Russian, English and US-qualified lawyers permanently based in Moscow, the total number of lawyers in all international offices of BLP being over 800. Over 1300 clients, including: major multinational investors operating in Russia, including 37 Fortune 500 clients, Russian and international banks & financial institutions, and Russian corporates - leaders on the national markets. Transactional support for inbound and outbound investments by Russian and international clients. Highly reputable local team well-known on the market for its excellent local experience of total legal advice for major Russian businesses and international investors gained over 20 years - from complex/multi-jurisdictional projects to day-to-day operational legal support. Goltsblat BLP is consistently ranked highly / recommended by The Legal 500, Chambers & Partners, IFLR1000, Best Lawyers and Vedomosti. Globally, the firm s broad-based expertise reaches across more than 50 legal disciplines and 20 industry sectors. In Moscow, the firm s key practice areas are: Corporate/ M&A Banking & Finance Real Estate & Construction Dispute Resolution Tax & Customs Commercial Compliance Competition & Antitrust Employment, Pensions & Benefits IP Goltsblat BLP is the winner of: Russia Law Firm of the Year Chambers Europe Awards 2015; International Law Firm of the Year (Europe) The Lawyer European Awards 2014; Client Service Law Firm of the Year Chambers Europe Awards for Excellence 2014; International Office of the Year The Legal Business Awards 2010 (Legal 500); Best Client Service Chambers Europe Awards for Excellence 2010; Best Law Firm in Russia ILO Client Choice Awards Goltsblat BLP is shortlisted for: International Law Firm of the Year The Lawyer European Awards 2015 and Legal Business Awards 2015 (Legal 500); Innovation in International Expansion 2011 Financial Times Innovative Lawyer Awards According to ranking by Vedomosti based on Best Lawyers research, Goltsblat BLP is 4th in the top-10 leading international law firms in Russia. According to national ranking by Kommersant.ru Goltsblat BLP was named the 3d largest law firm in Russia in BLP is the winner of, in total, 5 Law Firm of the Year awards and over 30 industry awards in the last few years, including The Most Innovative Client Service Award (Managing Partner Forum (MPF) Awards for Management Excellence 2015), UK Law Firm of the Year 2010 awards by both The Lawyer and Legal Week, Managing Partner of the Year, Real Estate Law Firm of the Year, Best Tax Team in a Law Firm, Planning Team of the Year, PFI/Projects Team of the Year, and Finance Team of the Year and others. European Awards 2014 Winner International Law Firm of the Year Excellent industry knowledge and business acumen. Great local and international knowledge. Chambers Europe 2015

12 MOSCOW Capital City Complex Moscow City Business Centre 8, Presnenskaya Nab., Bldg.1 Moscow , Russia Tel.: Fax: LONDON Adelaide House London Bridge, London EC4R 9HA United Kingdom Tel.: +44 (0) Fax: +44 (0)