Foreign licensees who receive income from russian jurisdiction must pay a corporate tax to Russia`s budget. Royalties that must be paid to a foreign donor if they are not attributable to the Russian permanent establishment of the licensee are subject to withholding tax that must be paid by the foreign donor`s tax agent (i.e. a Russian licensee). However, if the foreign licensee is incorporated and works in accordance with the laws of a jurisdiction that has signed a double taxation agreement with Russia, a reduced (or even zero) rate of income tax may be applied. The Tribunal`s practice stated that the existence of a license agreement concluded cannot be considered a proper use of the mark during the non-use procedure without the actual existence of goods/services on the Russian market. Whether this decision is in line with the provisions of the Russian tax code concerning stable institutions of foreign organisations and conventions on the prevention of double taxation is a matter of purpose. However, in a recent legal proceeding (SIP-251/2013), the Russian IP Court has ruled that if the trademark holder does not effectively control the actions of his “licensee” with respect to the use of the trademark, an unregistered licence (for example, he does not receive usage reports. B) would not be supported by such evidence. Enter, as expected, the hosting contract instead of the previously preferred license agreement.

Accordingly, the Tribunal found that the conclusion of a licensing agreement, since the taxpayer is a stable institution of a foreign corporation, shows that the taxpayer obtained an undue tax benefit by increasing its costs to the extent of the licence deduction. In a recently closed case, FAS ruled that Teva, which owns several pharmaceutical brands and patents, had violated competition law by refusing to enter into a licensing and distribution agreement with the Russian company Biotech. The two Australian breweries have responded with licensing agreements with foreign brands to brew their beers. A licensing agreement in Russia is one of the contractual forms of elimination of intellectual property rights. Under Article 1235, paragraph 1, of the Russian Civil Code, a party, in accordance with the licensing agreement, grants or undertakes to acquire exclusive rights over the outcome of an intellectual activity or on means of identification (licensing) – to grant another party (licensed) the right to use such a result or such means within the framework of the agreement. A license for a brand may be exclusive or non-exclusive. Unless otherwise stated, the certificate is not considered exclusive. Section 1236 also confirms that a licensee is not entitled to use his trademark himself, as long as the purchaser was entitled to such a mark under the exclusive licensing agreement.

The new procedure means that it is not necessary to make confidential information such as the financial terms of the contract available to the Trademark Office, as the contract bid becomes optional. Recently, with the help of the courts, the tax authorities have begun to establish new cases concerning the practice of intragroup spending. One case (No. 40-138879/14) concerned a dispute between a Russian company and the Moscow tax service over royalties paid to a foreign affiliate under a licensing agreement. The Tribunal`s practice of using the mark in an unregord licensing agreement is rather contradictory. Given Russia`s adherence to the Singapore Treaty, which provides that each party cannot apply for state registration in order to prove the correct use of a trademark in the non-use procedure, the courts consider that an unregistered licence is evidence of its use in addition to the actual presence of goods on the market.