Clarification of the concept of ``real ESTATE`` in the context of a tax dispute
The question whether one or another object is movable or immovable appears in business activity really often. Legislation has no straight answer. In the practice of our clients the problem has repeatedly arisen both in terms of tax regulation and in the field of land use and urban development.
State and municipal authorities of different competence in various regions diverges on the issue of the classification of an object to a particular type of property.
In the tax dispute considered by the Supreme Court, the concept based on provisions of the civil code of the Russian Federation on criteria of indivisibility of object and impossibility of movement without proportional damage which also defined the industrial equipment standing on the base as part of the real estate object is recognized insolvent.
The lower instances took into account the conclusions of the judicial technical expertise when making judicial acts. According to the Supreme court, the conclusion of the expert examination do not matter at all for the case. The experts answered whether it was possible to move the equipment without disproportionate damage, that is, they assessed the economic feasibility of dismantling.
The economic Board considered that it was necessary to evaluate the purpose of the facilities that are needed not for the maintenance of the building, but for the production of finished products or maintenance of the production process. Judges of the Supreme court referred the production line, conveyor and fire protection system to "machines and equipment" according to the all-Russian classification of fixed assets OK 013-94 (OKOF). The specified classifier allocates the equipment in separate group of fixed assets which are not part of buildings and constructions even if stand on the base.
Case reference: http://kad.arbitr.ru/Card/63d7a906-d1bc-4441-aec1-3eb9b2240939