Tax Compliance tax consultant Ekaterina Kopylova commented on the future consideration of the case in the court digest of Pravo.ru.

In recent years, the Supreme Court of the Russian Federation has repeatedly considered the issue of business splitting on its merits, primarily in terms of the procedure of tax reconstruction in such situations. And once again the Court will have to deal with the nuances of this tax phenomenon in the case of Trade Company Karel-Impex LLC.

Despite the fact that for the first time the legal position on the need to consolidate not only income, but also the expenses incurred by the participants of the business split scheme, as well as accounting for taxes paid by them, was expressed by the Supreme Court of the Russian Federation 2 years ago in the cases of OptimaStroy and Montazhstroy, the issue still requires the attention of judges.

Thus, the case of LLC «House Management Company of Sormovo District «Sormovo», to which the taxpayer refers, was the subject of consideration of the highest court twice and is now going through the third round.

The case of OOO Trade Company Karel-Impex interested the Economic Collegium in terms of the question of the need to recalculate penalties when offsetting the paid UST against the additional VAT in the order of tax reconstruction.

Indeed, the judicial acts adopted in the case of LLC «Trading Company Karel-Impex» do not correspond to the May position of the SCES of the Supreme Court of the Russian Federation in the case of Sormovo, that when offsetting payments of tax paid in connection with the application of the simplified taxation system against the debt and the scope of the taxpayer's obligations under the value added tax should be based on the absence of the budget of relevant losses requiring compensation in the form of accrual of penalties.

At the same time, from the point of view of theory, this issue is not as simple as it seems, since it involves such aspects as the legal nature of the penalty, the levels of the budgetary system of the Russian Federation, the need to balance private and public interests, and the assessment of the consistency of the taxpayer's actions.

Therefore, the Supreme Court could provide more detailed explanations revealing the essence of its position.

Thus, the May Ruling lacks explanations as to why in this case it is necessary to proceed from the compensatory nature of the penalty, and not to consider it as a measure of state coercion, ensuring the realization of public interest in the timely receipt of the tax amount to the budget. Earlier, the Supreme Court in the older case of Borets pointed out that the penalty encourages taxpayers to pay the tax amounts due in good faith, i.e. it is a measure of property (reconstruction) liability, which was referred to by the cassation in the present case of Karel-Impex in connection with the assessment of the actions of the taxpayer itself (denying the split so far, but at the same time claiming reconstruction of tax liabilities).

In addition, the issue of whether the fact that the simplified taxation system is credited to the regional budget, while VAT is a federal tax, matters, and whether in this sense the federal budget was harmed by the underpayment of VAT, despite the existence of tax payment in connection with the application of the preferential regime, has not been disclosed.

However, it is likely that, given the recently expressed position in the Sormovo case, the question of whether penalties should be adjusted for reconstruction in split cases is a settled issue and the Supreme Court's new determination will be aimed solely at correcting erroneous judicial decisions on the merits of the issue at hand, rather than revealing the legal basis for its current position.