Point of law: whether RAO must pay profit tax on the amounts of author’s remuneration which have not been distributed by RAO to authors?
Alternative attitudes: 1) it must, because upon the expiry of 3 year term from the moment of their receipt by RAO such amounts become the property of RAO and, consequently, constitute the latter’s profit; or 2) it must not, because RAO, being an accredited organization for the management of rights on the collective basis, may keep the unclaimed amounts and include them into the sums subject to distribution or use them for other purposes in the interests of the right-holders represented by RAO upon the expiry of 3 year term from the moment of their receipt.
Ratio decidendi: the second approach is legally correct. At the same time, while acknowledging the right of RAO for exemption from profit tax with regard to amounts in question, the Presidium pointed out that using them not in accordance with the purposes indicated in the law or the charter of RAO would entail the duty to pay profit tax.
Practical consequences: the Judgment says that prior court decisions in analogous cases if inconsistent with this interpretation may be reversed in the procedure and within the limits envisaged by Art 311 of the Commercial Procedure Code.
