Alexey Stanchin, Senior Tax Compliance Consultant, acted as the curator and prepared the Kutafin Legal Cup qualifying stage case in the "Tax Law" area.

On the opening day of registration in the official group of the championship participants had to fill out a special form and send their case solution of the qualifying stage in the form of a brief memorandum to the official e-mail of the organizing committee of the competition. 

Here's the case presented by the law firm Tax Compliance.

The facts of the case:

The developer LLC introduced a set of works to erect a capital structure from 2016 to 2018. According to the project documentation in the section of architectural solutions drawn up at the beginning of construction, the functional purpose of the object is declared - a hotel.

In 2018, the facility was erected and registered with the Rosreestr, the purpose of the structure in the USRN is indicated as an apartment building.

The name indicated in the USRN "Hotel with a roofed boiler room of block-modular type". The construction of the building was performed completely by the general contractor. According to the local estimate LLC "Developer" paid to the general contractor the sum of 2 500 000 000 rubles. For this amount were signed KS-2 and KS-3 at the end of 2018. The work was accepted without complaint.

The facility was financed partially by own funds of the Developer LLC and partially by the participants of share construction. In total, the participants of share construction contributed 1,000,000,000 rubles.

After completion of construction, the Developer LLC decided to sell the premises as apartments suitable for housing.

According to the results in 2018 there were alienated apartments with total value of 5,000,000,000 rubles.

Alienation took place in 2 ways: under contracts of sale and under agreements of participation in shared construction with persons who at the beginning of construction participated in the financing of the project.

Questions:

1. Determine the tax consequences of the Developer LLC.

2. What specifics of accounting for VAT deductions arise for the LLC "Developer"? What conditions must be met in order to take VAT deductions?

3. In December 2021 the tax authority issued a Decision on conducting an on-site tax audit. What periods is the tax authority entitled to audit for VAT and Income Tax?

You can see the solution to this case in the video below.

According to the results of the qualifying stage 16 participants passed to each direction of the competition, who passed to the main stage of the competition. The main prize is an internship in the company supervising the direction.