We have previously dealt with the case of Nova Print LLC, in which the issue was the compulsory collection of tax debts in the event that the tax authority violated the deadlines for conducting an on-site audit. At the end of May, the Supreme Court of the Russian Federation put an end to this dispute.

Nikita Zharov, Head of Tax Practice at TC, and Anastasia Arzhanova, Junior Tax Consultant at TC, commented on the court's ruling for Kommersant. 

In its ruling, the Supreme Court of the Russian Federation emphasized that the failure of a tax authority to comply with the deadlines for tax control measures should not entail a change in the procedure for calculating the deadlines for taking measures to collect debts.

The position of the Supreme Court of the Russian Federation is important for taxpayers, as previous conclusions of the Supreme Court of the Russian Federation when considering a similar issue were not always interpreted by the courts in favor of taxpayers. 

There is a practice that assumes that the two-year deadline for collection should be calculated from the date of entry into force of the inspection decision. Therefore, taxpayers who faced violation of procedural deadlines were not able to challenge the decision on collection. This approach justified delaying an audit even in cases where it was due to the fault of the tax authority.

The Supreme Court of the Russian Federation has endeavored to eliminate the ambiguous interpretation of its earlier positions and has expressly stated that the mere violation of the time limits for an audit does not deprive an inspectorate of the right to levy penalties, but this can only be done within 2 years.

This case will remind tax authorities of the importance of observing procedural deadlines for conducting an audit and the consequences of delaying it. 

For bona fide taxpayers it becomes another argument in a dispute with the tax authority in case of excessive in duration application of tax control measures. At the same time, it is obvious that if the delay of a tax audit is the fault of the taxpayer, this position will not work.