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Do I need to tax the profit amount of compensation for confiscated land

Question - answer - Legal advice 10.07.2018 at 13:54

Question - answer - Legal advice


as the sum of the consideration received by the taxpayer in the

seizure of land for state and municipal needs

subject to profit tax under the General procedure. This conclusion is contained in

the letter of the FTS of Russia from July 3, 2018 number of CD-4-3/12727@ "On taxation

income in the form of amounts of compensation payable on the compulsory purchase of land

plots in the state (municipal) property". According to

the Ministry of Finance, is referenced in the Department, the funds paid

to the taxpayer in compensation for a seized land plot,

, including compensation for loss of profits, repayment of the loss incurred in

the result of withdrawing land plots for state or

municipal needs are included in the tax base under the profit tax.

since such income is not named in article 251 of the Tax code,

which is determined by income not taken into account in determining the tax base

tax on profit of organizations. Financiers noted that the list

contained in this article, an exhaustive and, therefore, not subject

the extension (a letter of the Department of tax and customs tariff policy

the Ministry of Finance of Russia dated February 17, 2016 № 03-07-11/8736 "On VAT and the tax on

profit in obtaining compensation for the confiscation of land and

compensation of expenses to the fixed asset liquidation"). A similar conclusion contains and

in a letter to the Department of tax and customs policy of the Ministry of Finance of Russia

April 9, 2018 No. 03-03-06/1/23095 "About the profit tax at withdrawal

the land through its purchase for state and municipal



, Federal tax service of Russia pointed out that the tax authorities must first

to be guided by the decisions, rulings, information letters

the Supreme Arbitration Court of the Russian Federation, as well as solutions,

decrees, letters of the Supreme Court of the Russian Federation from the day of their

official embed.

the Tax office referred to the

the position expressed by the Presidium of the Russian Federation in the Resolution from June 23, 2009

, No. 2019/09 on case № A32-7432/2007-56/191-2008-56/23. According to this

the decision in case of forced withdrawal of land plots amount

the compensation may not include profit tax, and therefore,

should not be included in the tax base for this tax.