Tax Outcomes 2021 and Tax Administration Trends 2022

Tax Outcomes 2021 and Tax Administration Trends 2022

Tax Compliance and Kommersant publishing house held a joint conference titled "Tax Results in 2021 and Tax Administration Trends in 2022". The event was attended by representatives of the Federal Tax Service, business and the professional community.

The experts discussed the main events of the year in the field of tax control, among which were highlighted the new approaches to tax reconstruction, the increase in inspections related to the use of business splitting schemes, benefits for IT companies and other relevant issues.

Anastasia Smotritskaya, Deputy Head of the Transfer Pricing Department of the Russian Federal Tax Service, highlighted the position of the Federal Tax Service regarding intra-group services and loans. She stressed that the letter of the Federal Tax Service of February 12 on intra-group activities is a continuation of the letter of the Federal Tax Service on February 12, 2021, and did not recommend to consider them separately from each other. Anastasia also dispelled the fears of taxpayers that local inspectors would not understand what companies mean by showing certain documents, especially since the aforementioned letter of the Federal Tax Service dated August 6, 2020, does not strictly define what documents may serve as proof of services.  "Cross-border transactions and everything related to them are controlled at the level of the central office of the Federal Tax Service, in which there is a second, double control, already by specialists who 100% will figure out what was there in this business", - noted Anastasia Smotrytskaya.

Mikhail Begunov, managing partner of Tax Compliance, highlighted the tax reconstruction as a key event in practice and considered the real situations where the business can expect to recalculate the additional charges. For example, previously the tax authority could withdraw all expenses and profit tax deductions on the basis that the primary documents were signed by an unauthorized person or the director of the counterparty refused to manage, which in the opinion of the Federal Tax Service was a sign of a technical company. Now this fact in itself is not a sufficient basis for the tax authority's claims. "You can enter into an agreement today, the counterparty worked with you normally, but after 2-3 years he lost interest in the business and then no longer responds to calls. But nevertheless the delivery was made, the work was done, and everything was good at that time", - gave an example from practice Mikhail Begunov.  

Mikhail Brazhnik, Director of Tax Administration at Rostelecom, told about the benefits for IT-companies implemented over the past two years, their limitations and pitfalls. He stressed that not all technology companies can qualify for them, for example, such marketplaces as Ozon, Wildberries or Yandex do not meet the criteria, as they can distribute advertising and connect the buyer and seller, which is a limiting factor.

The next important trend in tax administration is the growing number of inspections related to the fragmentation of business. Andriy Solomyanyy, partner of Tax Compliance and tax attorney, addressed this topic in detail.  He shared the industry peculiarities of the Federal Tax Service claims on pharmaceutical business splitting by the example of several high-profile cases: the ruling of the AC of the Ural district from 03.11.2020 "Pharmacy Agromed" and LLC "Yukon-Pharm", the decision of the arbitration court of Kursk region on the case of JSC "Tselitel" and LLC "Tselitel" and the ruling of the AC of SKO from 17.06.2019.

The experts noted that the amounts of additional accruals grow every year. In the first half of 2021, Russian enterprises were additionally charged 170.2 billion rubles of tax payments and fines. These figures show that "not only tax managers and lawyers, but the company employees themselves should start thinking about taxes", said Elena Kucheryavaya, Director of Legal Affairs and Personal Data Protection at LifeScan. She explained how, following the introduction of Article 54.1, companies are distributing tax risks between the parties to transactions. For this purpose, since 2017, contracts with counterparties have increasingly begun to use a tax clause on compensation of amounts, taxes, penalties and fines paid due to claims by the tax authority.

The conference also discussed the criminal law risks of tax crimes, the subtleties of the wording and application of the tax clause, as well as the specifics of tax changes for real estate developers