The Ministry of Finance has prepared draft amendments to the Tax Code of the Russian Federation providing for the expansion of the practice of out-of-court collection of tax debts for individuals. Tax Compliance tax consultant Ekaterina Kopylova commented on the main provisions of the draft in a Kommersant article.

On the one hand, the bill aims to relieve the work of justices of the peace. This is a positive step towards speeding up court proceedings in other categories of cases. The proposal for an out-of-court procedure for collecting tax debts from individuals who are not sole proprietorships was previously voiced by the Chairman of the Supreme Court of the Russian Federation in the fall of 2022, but was then rejected by the State Duma. Now, probably, the need for changes in tax legislation has become more obvious, as the load on justices of the peace has increased even more.

On the other hand, it is necessary to ensure the balance of public and private interests. It is the judicial procedure that provides most of the guarantees to citizens and is the realization of the right to judicial protection provided by Article 46 of the Constitution of the Russian Federation.

But it is necessary to be realistic. In our opinion, this is a logical change, largely due to the development of the practice of interaction of taxpayers - individuals with the tax authorities, including through the personal account of the taxpayer and the unified portal of public services.

Apparently, the legislator proceeds from the fact that individuals are increasingly successful in tracking the receipt of notices and decisions taken by the inspectorate through electronic channels and personal visits, and therefore can promptly respond to them by submitting their objections and appealing in the manner prescribed by law, which suspends the collection procedure (this rule is retained in the draft law).

In our opinion, it is the practice of applying the out-of-court procedure to sole proprietorships that has now made it possible to extrapolate this experience to individuals who are not sole proprietorships. 

According to the experience of entrepreneurs, with proper preparation and quality interaction with representatives of the tax authority, significant violations can be resolved without court proceedings, although it may be necessary to draw the attention of a higher tax authority to the unlawful actions of the inspectorate by filing a complaint.

The draft law assumes the initial filing of objections to the same tax authority, which additional taxes to the citizen, the effectiveness of such an appeal may be questionable.

However, now there are some positive trends in the settlement of the dispute just at the pre-trial stage, the tax authorities themselves seek a speedy resolution of the conflict and voluntary payment on the part of the taxpayer.

It is important to clearly formulate a strong position, to prepare a convincing legal justification, in this case, the auditors themselves can adjust their initial claims, because the cancellation of the decision in court demonstrates the imperfection of the measures taken, and court proceedings consumes even more resources of the authorized body.

As a rule, on procedural issues related to debt collection, tax authorities and higher inspectorates leave their decisions in force, and if the taxpayer is sure that they are illegal, it is necessary to involve the court.

It is important to note that the new procedure in any case does not exclude the possibility of appealing the actions (inaction) and decisions of the tax authorities in court under the general rules provided by the CAS RF.

Another issue is that in the case of individuals who are not sole proprietors, the lack of knowledge of tax issues makes it difficult for them to form and convey their position. Appeal to consultants and court procedure require additional costs, which are economically justified in the case of significant disputed amounts.

Therefore, globally, the adoption of this initiative is likely to improve the «collectability» of taxes from individuals and the further development of the practice of interaction between individuals and the tax service.