After the tax exemption of movable property, many taxpayers faced examples of ambiguous qualification of property owned by the company. This resulted in an increased number of disputes where the distinction between movable and immovable property depended on the industry, the parties to the dispute and their goals. There was a trend towards reclassification of movable property to real estate, which was to be taxed as before.
As an example, the following items have recently been classified as real estate in the tax disputes case-law: on-site process pipelines and gas ducts, boiler equipment, deck cranes and transformer substations.
The case of ZAO Lesozavod 25, which was represented before the Supreme Court by Taxology Managing Partner Ilya Mokryshev, Partner Alexey Artyukh and Lawyer Egor Lysenko, concerned equipment of a wood pellet plant: conveyors, protection systems and other equipment (see case no. A05-879/2018). Courts of three instances took the side of the tax authority, which recognised these items as real estate and levied additional property tax.
Our lawyers were able to secure the quashing of the judgement in this case, which has now been remitted for a retrial. We are confident that this positive event will have significant influence on the development of further case-law.
Congratulations to the colleagues who participated in the proceedings and taxpayers who will find the results of today's hearing useful in their work!