START-ALLIANCE LLC. PROVIDES PROPERTY VALUATION SERVICES IN MOSCOW AND OTHER RUSSIAN REGIONS.

Property valuation in the process of a buy-sell transaction is probably the most common purpose of valuation in Russia. Although the parties of the deal (buyer and seller) may determine the price themselves (unless otherwise is required by the law), they often prefer to have the subject property independently valued in order to obtain a realistic price benchmark (market value) for the subject property as the date of transaction.

Valuation report prepared by an independent valuer will prove to the all the parties concerned (shareholders, parent organization, government authorities, etc.) that the transaction was conducted in good faith, that each party acted in its own interests and was informed about the actual market situation, real market value of the subject property and the value of similar properties.

To have an independent valuer’s opinion about the market value of the subject property is also important in case of tax payments adequacy review by tax authorities, because the Russian Tax Code Art. 40 allows tax authorities to control sales prices for the purposes of tax base calculation: “In the circumstances envisaged by paragraph 2 of this Article, when the price of goods, works, or services applied by the parties to a transaction is more than 20% above or below the market price of identical (similar) goods (works or services), a tax authority may pass a motivated decision to charge additional tax and penalties calculated as if the results of this transaction were estimated on the basis of market prices for respective goods, works or services”.

In a dispute with a tax inspection alleging underestimated income or underinvoiced sale of products, a valuation report for the subject property will enable you to produce persuasive arguments supporting your position in order for the transaction price to be recognized as consistent with the current market value. Another advantage of an independent property valuation is that the report issued to the customer has the status of an official document of evidential significance and may be used in the court in tax cases. When concluding a property valuation agreement, depending of the purpose of valuation, you may instruct the valuer to determine one or several types of value for the subject property:

• market value – the most probable price of the property if sold in the open market;
• replacement value – the total cost of producing a property identical to the subject property at market prices;
• investment value (the value assuming the earning capacity of the property and particular investment objectives);
• other specific types of value.