Property valuation in a process of closing a buy-sell transaction is probably the most common purpose of property valuations in Russia. Although parties of the deal (buyer and seller) can determine the price themselves (unless otherwise is required by law), they often prefer to have the subject property independently valued in order to obtain a realistic price benchmark as of the date of transaction.
Valuation report prepared by an independent valuator will prove to the all the parties concerned (shareholders, parent organization, government authorities, etc.) that the transaction was conducted in good faith, that each party acted in its own interests and was informed about the actual market situation, fair market value of the subject property and the value of similar properties.
To have an independent expert's opinion about the market value of the subject property is also important in case of tax payments adequacy review by Russian tax authorities, because the Russian Tax Code Art. 40 allows tax authorities to control sales prices for the purposes of taxabale income calculation: “In the circumstances envisaged by paragraph 2 of this Article, when the price of goods, works, or services applied by the parties to a transaction is more than 20% above or below the market price of identical (similar) goods (works or services), a tax authority may pass a motivated decision to charge additional tax and penalties calculated as if the results of this transaction were estimated on the basis of market prices for respective goods, works or services”.
In a dispute with a tax office alleging underestimated income or underinvoiced sale of products, a valuation report for the subject property (goods) will enable you to produce solid arguments supporting your position in order for the transaction price to be recognized as consistent with the market value. Another advantage of an independent valuation is that the valuation report issued to the customer has the status of an official document of evidential significance and may be used in court in tax proceedings.
When concluding a property valuation agreement, depending of your purpose, you may instruct the valuator to determine one or several types of value for the subject property:
We have extensive experience in property valuation in Russia and should you require any assistance with this matter, please contact us by email info@koo.ru or Telegram