News / 14.04.2021

Dividends are not subject to customs payments: the Russian Supreme Court has drawn a line in a precedent-setting case

On 7 April, Supreme Court judge T.V. Zavyalova dismissed the cassation appeal of the customs authority against court judgments issued in favour of a client of Borenius Russia. This was a successful outcome of a precedent-setting dispute in a case concerning whether dividends should be included in the customs value of imported goods.

As we have previously reported, the customs authority in this dispute took a position that was extremely dangerous for business. According to the customs authority, dividends paid by a subsidiary to a European company should have been included in the customs value of goods acquired from the parent company. In the lower courts, we succeeded in refuting these arguments and proving that dividends were a specific corporate payment that has a specific taxation regime and is not subject to customs regulation.

The approach we defended was fully supported by the Supreme Court which stated in its Ruling:

“… given the legal nature of dividends <…> the effect of such an element as dividends on the structure of the customs value is possible if payment of the dividends is a precondition for the sale of certain imported goods.

Having stated that the customs authority did not provide any evidence that the payment of the dividends in dispute was a condition of the sale of imported goods, and nor did it provide any evidence that the related party relationship between the company and the seller affected the value of the transaction and the future distribution of the company’s profit, the courts held that the customs authority did not prove that circumstances existed preventing the company from applying the method it had declared for calculating the customs value.

We expect that lower courts will take this position on board in other customs disputes involving dividends.

For our recommendations on litigating such cases, please go to.

“I have watched this case with great attention for two years. Where there was almost no law enforcement practice on the issue, the customs authorities defended an interpretation of the openly unsuccessful wording of the law, which is extremely dangerous for business. It had every chance of becoming a new policy of the Federal Customs Service. Our case was the first in a series of similar customs checks on dividends in different regions. Therefore, we understood that we were responsible not only for the client’s case, but also for the possible outcome of future disputes under similar circumstances.


I am deeply satisfied with the result we achieved: the courts fully agreed with our position that it is inadmissible to include dividends in the customs value. I hope that our efforts will not have been in vain for all further practice.


I would like to thank the Borenius Russia team for their excellent work. “


Andrei Gusev, Managing Partner Borenius Russia

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