The Tax Service has summarized court practice in disputes with the tax authorities and published a review. Head of Tax Compliance practice Ivan Tsvetkov analyzed this review in EZh-Yurist.

In determining a taxpayer's income from the sale of real estate for which its cadastral value was changed due to the establishment of its market value on the basis of a court decision, the tax inspectorate considered it possible to apply the new cadastral value in calculating personal income tax.

The tax inspectorate concluded that the cadastral value established by a court decision should be applied in determining the personal income tax base if it corresponds to the market value of the object in order to ensure equality and fairness in taxation.

Taking into account the applicant's argument that the cadastral value of the sold building was challenged in court and reduced, the inspectorate noted that for taxation purposes there is an advantage in applying the cadastral value of real estate objects equal to the market value over their cadastral value established by the results of the state cadastral valuation, since the market value is obtained as a result of an individual assessment of a particular real estate object (rulings of the Constitutional Court of the Russian Federation of 05.07.2016 No. 15-P and 11.07.2017 No. 20-P).

Currently, the cadastral value of a real estate object is applied for the purposes provided for by the legislation of the Russian Federation from the date of the beginning of application of the cadastral value changed due to the establishment of the cadastral value as a result of consideration of disputes on the results of determining the cadastral value of a real estate object.

In fact, we are talking about retrospective application of the cadastral value, which was established on the basis of a court decision or a commission for consideration of disputes for the entire period from the date of entering the original cadastral value into the Unified State Register of Real Estate in case of its reduction.

Thus, the positions of the Federal Tax Service of Russia and the Supreme Court of the Russian Federation stated in the Cassation Ruling No. 47-CAD24-3-K6 dated 19.06.2024 and allowing the possibility of retrospective application of the cadastral value of real estate objects in case of revision of the cadastral value by court decision, fully correspond to the objectives of the adopted amendments to the legislation on cadastral valuation and appraisal activities, in particular, to ensure economic feasibility in taxation.