Russian Supreme Arbitration Court: parent company may be held liable for taxes due by its subsidiary

The Russian Supreme Arbitration Court ruled in its Decision of 25 October 2011 N 4872/11 that a parent company may be held liable for the taxes due by its subsidiary.

In this case, the tax authorities attempted to collect VAT and unified social tax from a taxpayer, Izhevsky Weapon Plant, but failed due to the lack of funds and assets of the taxpayer.

Subsequently, the tax authorities claimed the taxes due from the parent company of the taxpayer, Izhmash…