The Ministry of Finance of the Russian Federation has clarified that a tenant may not deduct rental expenses for using immovable property if the property owner has still not registered its property rights for the immovable property.

However, the Russian courts state that a tenant may indeed deduct rental expenses, irrespective of whether the property owner has registered the immovable property.

Consequently, if a tenant does deduct expenses associated with leasing immovable property that has not been registered by the property owner, the tax authorities may dispute these deductions.

[Letter No. 03-03-06/1/292 of the Ministry of Finance of the Russian Federation, dated 13 May 2011]