The Federal Tax Service (FTS) issued a Letter dated 25.11.2021 No. BS-4-21/16452@, where clarified its position concerning the differentiation of movable and immovable property for the purpose of property tax exemption.
In particular, the FTS pointed out that it matters whether the disputable objects of fixed assets (machinery and equipment) were movable property at the time of their acquisition, as well as whether such fixed assets were accounted for as separate inventory items.
By themselves, the criteria of a strong connection of an item with the land, the impossibility of dividing it without destroying, damaging or changing its purpose, as well as combining items for general purpose use in terms of civil law, cannot be applied when deciding on exemption from taxation of movable property. The FTS believes that the civil law approach does not allow distinguishing investments in the renovation of production equipment and the creation of non-capital facilities from investments in the creation (improvement) of real estate objects - buildings and capital facilities.
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NAZALI TAX & LEGAL |