Not All Real Estate is Moveable Property. The Qualification of Movable and Immovable Property When Calculating Property Tax in the Electricity Sector

In recent years, there have been active discussions about classifying property into movable and immovable for tax purposes. Five years ago, the Russian Supreme Court, seeking to unify law enforcement practices, proposed conceptual approaches that would eliminate certain legal uncertainties in this regard. The court’s decision was supposed to ensure uniformity in judicial practice, which, in turn, would help to fairly distribute the tax burden among taxpayers. However, subsequent clarifications from the Federal Tax Service and the judiciary, and, as a result, mass control measures initiated by the tax authorities with respect to electric power companies put this problem back on the radar once again. Such actions could lead to billions in additional taxes and significantly increase the financial burden of companies. The law enforcement and judicial practices emerging in the electric power industry could spread to other sectors of the economy, which makes these issues even more important. The common understanding and consistent application of legal norms should be an important step towards strengthening the legal and economic system, which would benefit both public institutions and private economic entities and help create a favourable business climate and increase investment.