Benefits Upon Termination of Employment by Mutual Agreement Deductible as Income Tax Expense

15 May 2017
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Key takeaways

  • The Supreme Court of the Russian Federation has recently issued a ruling concerning tax deductibility of termination benefits (the "Ruling").
  • The Ruling specifies the amount of termination benefits which for tax purposes may be considered reasonable and proportionate to ordinary severance payments and, accordingly, treated as income tax expense.
  • The Ruling determines where an employer must justify that amounts of termination benefits are economically feasible.