Head of Dispute Resolution at Jingsh Russia Denis Aulov commented to Vedomosti on the tax treatment of companies’ expenditure on protection against unmanned aerial vehicle attacks.
Vedomosti published an article concerning the position of the Federal Tax Service on the deductibility of such expenditure for tax purposes. During the webinar “Corporate Income Tax in 2026”, Andrey Konkov, Deputy Head of the Corporate Taxation Department of the Federal Tax Service, stated that expenditure on protective equipment against UAV attacks may be taken into account when calculating corporate income tax, provided that the general requirements set out in Article 252 of the Russian Tax Code are satisfied.
Denis Aulov noted that the supporting documentation confirming that the expenses were genuinely incurred may include a management order introducing enhanced security measures, internal memoranda from the relevant departments, a site inspection report, an opinion issued by a specialist or expert, information on UAV attacks or an increased threat level in the relevant region, as well as documents issued by the Ministry of Emergency Situations, other public authorities, a chamber of commerce and industry, an insurer or other competent persons.
Expenditure on restoration following a UAV attack also requires separate documentary substantiation. In Letter No. 03-03-06/1/25700 dated 14 March 2025, the Russian Ministry of Finance stated that such expenditure may be recognised as non-operating expenses under Article 265(2)(6) of the Russian Tax Code, provided that the extraordinary nature of the event is duly confirmed.
Denis Aulov also noted that the tax authorities generally challenge not the need for security measures itself, but the specific tax treatment applied to the expenses and the evidence supporting that treatment. Questions may arise, for example, where the expenses are not connected with income-generating activities, the documents do not confirm that the relevant work was actually performed, or the restoration work in substance constitutes an upgrade or modernisation rather than the elimination of the consequences of an extraordinary event.
The most prudent approach for businesses is to act proactively: prepare a documented risk assessment in advance, correctly classify the expenditure as current, capital or depreciable, record the actual use of the protective equipment, and compile a set of documents confirming the extraordinary nature of the event. Such documentation is critical for substantiating the tax treatment of restoration costs.
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