The Experience of the Olympics-2014 Organisation May Be Useful for the World Cup-2018

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The Winter Olympics in Sochi may become an excellent lesson for organisation of the World Cup in 2018. Similar to Sochi-2014 importers of sport merchandise for the FIFA World Cup hope to get a preferencial tax regime. Experts think that reorganisation of Olympstroy and Championatstroy can also become a good variant. 

The State Duma has passed a normative standard which allows to exempt from taxation all equipment required to hold the Olympics in Sochi, which is brought through the Russian customs. “This measure will allow to regulate the organisational process exempting it from redundant red tape, to bring down the level of abuse in this sphere,” – Jury Vasilyev, Chairman of the State Duma committee on the budget and taxes, says. Besides, a special tax regime covers the Olympics-2014 which exempts organisators from the fiscal burden.   

Experts suppose that practice of tax preferences of the Olympics-2014 may become useful for organisators of the next sports festival – the FIFA World Cup as well. “A special tax regime will be similar to the Olympics in Sochi-2014. Even categories will perhaps remain the same,” – Stepan Guzey, Head lawyer of Vegas Lex, says.  

“In connection with the forthcoming World Cup-2018 in our country we are to wait for introduction of corresponding alterations to the Tax Code concerning several taxes analogous to existing ones in legislation on organisation of the Winter Olympics. They are to appear in years to come”, - Andrew Felyust, Tax and Customs Lawyer of Yakovlev & Partners, predicts. In his opinion new tax preferences should affect the interests of legal persons engaged in preparation of the World Cup, as well as citizens in the course of calculation and payment of NDFL (Personal Income Tax). 

Andrew Pushkin, the member of the expert council of the Centre for PPP development, Executive Partner of Tenzor Consulting Group, agrees that practice of preparation for the Olympics will be a weighty argument for the World Cup. However, in his opinion, the key aspects will be represented not by fiscal easing, but by administration of the project “inclusive of a decentralisation element”..

Andrew Pushkin “In this case two variants can be supposed – creation of a separate management structure, Championatstroy for example, or delegation of authorities to already existing corporation, that is to Olympstroy. However, in the latter case I would advise to make inside structural changes aimed at a struggle against bureaucracy existing in processes inside the corporation, and of course, to change the name”, - Mr. Pushkin says ironically.

The decision on liquidation or restructuring of the corporation will be made only after it is clear on whose balance all infrastructre objects will be transfered. “It is certain that this decision will not be made inside the company,” – the source in Olympstroy says. 

On the whole, in the coming years tax burden will only increase. Huge expenses on the World Cup can significantly raise the level of fiscal deductions. “It may bring us back to 2007 – concerning the fact how taxation authorities treated taxpayers, especially in relation to activation of control measures. It was determined by necessity to refill the budget,” – Mr. Guzey predicts. The business will be the first to feel this. 

Natural persons can also experience the negative effect: payment of property tax and land tax calculated on the basis of a market value of property and land will influence this. However, Vyacheslav Leontyev, Executive Partner of Leontyev & Partners, has a completely different opinion. He is sure that holding of sports events, even those of the World Cup level, are unlikely to increase the tax burden.

Besides, originally Aleksey Kudrin, Head of the Ministry of Finance, was totally opposed to the idea of holding the World Cup-2018 in Russia, the sources close to the minister told RBK Daily. “Thanks to” the World Cup the federal budget will be reduced by 200-300 milliard rubles (not including expenses on infrastructure), and the Minister of Finances considers such huge expenses wasteful. 

 

08 December 2010
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