The consolidation of financial, production and human resources has long acquired a global character. In this respect, Russia is no exception. The creation of vertically integrated corporate holding structures can also be regarded as an organizational and legal indicator of these economic processes. This development gives rise to the problem of the regulation of corporate group taxation.
It should be appreciated that, in Russian legislation, there is no comprehensive statutory regulation with regard to the legal status of a corporate group. Specifically, the draft of the federal law “On holding companies” has not been approved.1 In addition, the Civil Code of the Russian Federation (hereinafter: RF CC), which establishes the basis for the regulation of corporate relationships, does not contain special provisions with regard to holding companies. A number of Federal Laws, i.e. “On joint stock companies”, 208-FL of 24 December 1995 (revision2 of 31 December 2005), “On bankruptcy”, 127-FL of 26 October 2002 (revision of 24 October 2005),3 “On securities markets”, 39-FL of 22 April 1996 (revision of 27 December 2005), and certain other laws refer to corporate groups, but do not establish the relevant characteristics for corporate groups.4 The resulting statutory lacunas are partly compensated for by local regulations in respect of certain corporate groups that have adopted regulations in their own interests within the framework of the RF CC and to comply with anti-monopoly legislation.
Despite this, if Russian lawyers are required to give a formal definition of a corporate group, reference is often made to the temporary ruling “On holding companies that are created by transforming state companies into joint-stock companies”, which was approved by the Russian Federal Presidential Decree “On measures of implementing industrial policy when privatizing state companies”, 1392 of 16 November 1992. According to Para. 1(1) of Decree 1392, a holding
company is a company (irrespective of its organizational and legal form) whose assets include a controlling holding in the shares of other companies. The definition and Decree 1392 would, however, appear to be obsolete in the present economic context of Russia. This situation in civil and commercial legislation reflects the generally insufficient development of a corporate group taxation regime in Russian tax law. It is, however, sometimes argued that the tax legislation, in surpassing the development of civil and commercial criteria, is attempting to do the work of other branches of the law, in particular the civil and commercial branches, by defining intra-group relationships for tax purposes in a specific way.