Maxim Ali has evaluated for the Novy Prospect the chances of the shopping centers to change the city legislation on tax benefits
Five St Petersburg shopping malls asked the Federal Antimonopoly Service of the Russian Federation to check for compliance the city law “On introduction of changes into some laws of St Petersburg about taxes and charges” with the federal law “On competition”. The city bill adopted in July 2020 gives the right to a 50% relief on property tax for the second quarter of 2020, but only shopping malls with the a certain code in the Russian National Classifier of Economic Activities are able to use the preferences. It should be noted that about 70% of the shopping malls in St Petersburg have another code, so the law creates a “negative precedent in which the selected part of the market participants formally gain a competitive advantage over other companies engaged in similar activities in St Petersburg”, as the shopping malls representatives mentioned.
According to Maxim Ali, Senior associate at Maxima Legal, the entrepreneurs have a chance to solve the situation positively for themselves. “The formal criterion of the certain code chosen by the authorities does not work adequately and gives hope for the support of only an arbitrarily chosen handful of companies and not the whole industry as it should be,” explained the expert to the Novy Prospect Internet media. Maxim emphasised that there is “a large array of court practice, which reasonably suggests that the code in the Russian National Classifier of Economic Activities is only a statistical tool and does not reflect what the company actually does. So it is extremely strange to deprive the company of the industry benefits».
However, as Maxim Ali specified, the Federal Antimonopoly Service cannot change St Petersburg legislation, for this purpose the antimonopoly service will have to go to a court. “In general, the same actions can be performed by the shopping centers themselves. Perhaps, this way would be more effective,” concluded the expert.
To read the full article (in Russian), please see the Novy Prospect website >>>