The Federal Tax Service of the Russian Federation (the "FTS") has clarified that the expenses an organisation has incurred when holding promoting events with the participation of its distributors (either alone or by hiring a third party) may be treated as advertising expenses for the purpose of profit tax.

The FTS has stipulated that the promotional events being held must comply with the legal definition of advertisement, namely, such events must be aimed at attracting the attention of the general public.

Consequently, the fact that distributors, whose number can be definite, take part in promotional events is of no consequence, provided that eventually the number of persons who are to receive the advertising information from distributors is impossible to determine (these people thereby qualifying as general public).

[Letter No. ED-4-3/14401 of the Federal Tax Service of the Russian Federation, dated 5 September 2011]