Pre-court settlement of tax disputes

• Employee involved

  Ivan Tsvetkov

• Process description

  During the audited period, the joint-stock company carried out water supply and water disposal of facilities, including residential buildings, industrial facilities and social infrastructure facilities. As a result of the field tax audit, the tax authority concluded that the Company had received an unjustified tax benefit in the following episodes: (1) provision of motor transportation services by a person who is not a party to the contract; (2) unjustified inclusion of amounts of written-off accounts receivable in non-operating expenses; (3) Illegal non-recovery of VAT, non-deduction of VAT and overstatement of expenses on transactions, VAT and expenses on which were reimbursed by subsidies as gratuitous contributions to property that did not increase the Company's authorized capital; (4) Illegal non-inclusion in non-operating income of a part of the subsidy equal to capital investments in depreciable real estate and written off by the Company through the depreciation mechanism. The Company, while not disputing the amounts of additional charges imposed by the tax authority in the episode involving the unjustified inclusion in non-operating expenses of amounts of written-off accounts receivable, disagreed with the tax claims in the other episodes.

• Result

  Following a study of the legal position, which was developed by Tax Compliance specialists based on the results of the analysis of the actual circumstances of the dispute, the tax authority made a decision to satisfy in full the Company's claims in respect of profit tax. In addition, the tax authority satisfied the Company's claims (1) on the necessity to carry forward the unused amount of losses of previous years to reduce the taxable base for profit tax, (2) on the necessity to reduce the amount of the penalty due to the presence of mitigating circumstances (the amount of the penalty was reduced by 99%), as well as (3) on the calculation of penalties taking into account the moratorium on their accrual. Thus, the tax authority satisfied the Company's claims with respect to profit tax, the need to carry forward the unused amount of losses from previous years, and the need to reduce the fine and penalties in full, which significantly reduced the amount of additional charges - over RUB 10 million (approximately 66% of additional charges).

The client provided services to appeal against the results of a field tax audit, the basis for the collection of taxes was the assumption of the tax authority of the fictitious nature of the transaction to increase the price of goods

• Purpose

  Confirm the actual movement of goods from importer to customer, confirm the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Mikhail Begunov

• Process description

  An on-site audit was carried out in relation to a client, as a result of which additional VAT and profits tax were charged on relations with a controlled transit counterparty. According to the tax authority, the actual purchase of goods was carried out directly from a foreign supplier. As part of the legal defense, a legal position has been developed to calculate and document the actual expenses of the Company on the acquisition of goods based on the price set by the foreign counterparty, as well as costs associated with the transportation of goods. Due to the absence of primary documents, the Company initiated an independent expert assessment of the market value of transportation and other direct expenses included in the markup of goods from the disputed counterparties.

• Result

  According to the results of the developed legal position it was possible to prove the lack of controllability between the participants in the chain of contractual relations, to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.

The client was rendered services to draw up an objection to the act of a tax audit, additional materials of tax control, the basis for the collection of taxes was the assumption of the tax authority that the organization has not carried out construction work on the site.

• Purpose

  Confirm the actual performance of works by subcontractors for the construction of the Moscow-St. Petersburg Expressway, confirming the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Alexey Stanchin

• Process description

  An on-site audit was carried out in respect of the client, as a result of which additional VAT was charged on the counterparty. According to the tax authority, in fact the specified work was not performed by the disputed counterparty, but was performed by the taxpayer itself or other organizations. In the legal defense developed a legal position, which proved that the performers were part of the same group of companies, consisting of more than 12 legal entities. The taxpayer, when working with the counterparty considered it as a single economic entity and could not know about the corporate structure of the counterparty.

• Result

  According to the results of the developed legal position it was possible to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.

The reality of the activities of subcontracting organizations was proved and the claims of the tax authority were removed

• Duration

  February 2023 - May 2023

• Purpose

  Challenge the tax authority's claims that the company used "unfair counterparties" in a chain of subcontractors.

• Employees involved

  Mikhail Begunov, Ivan Tsvetkov

• Process description

  A tax authority refused to take into account VAT expenses and deductions in respect of a taxpayer's relations with several counterparties. Taks Compliance specialists have developed a position which provides for both a full appeal against additional tax assessments on several episodes and the application of "tax reconstruction".

• Result

  Arguments and arguments formed for the taxpayer were accepted by the tax authority. Tax claims were reduced by 80%: by more than 410 million rubles.

The client was rendered support services in the frame of on site tax audit, objections to the act of tax audit, additional materials of tax control were prepared, the basis for the recovery of taxes was the assumption of the tax authority of the technical links for the purpose of obtaining deductions for VAT and income tax.

• Purpose

  Confirm the actual provision of transport and freight forwarding services rendered to the client, to apply the reconstruction of transportation services, to confirm the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Alexey Stanchin

• Process description

  An on-site inspection was carried out in respect of the client, as a result of which additional VAT and income tax were charged on relations with controlled transit counterparties. According to the tax authority, the purchase of goods was actually carried out directly from organizations that apply special tax regimes (without VAT). As part of the legal defense developed a legal position to challenge the technical nature of the activities of the disputed counterparties, for part of the episodes was applied to the reconstruction of the income tax.

• Result

  According to the results of the developed legal position it was possible to prove the lack of controllability between the participants in the chain of contractual relations, to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.