The Russian Ministry of Finance has issued guidance dated 8 June 2015 that clarifies the corporate and value added taxation of fines or penalties paid to a taxpayer by a counterparty that failed to meet its obligations under the terms of a contract.
The guidance states that under Russia's Tax Code, income in the form of fines, penalties, and other sanctions payable for a breach of contractual obligations is considered taxable income, and must be recognized for corporate tax purposes on the …