Cases

Challenging the acts of prosecution on violating the deadline for CFC filing

• Employee involved

  Alexey Stanchin

• Process description

  Tax authorities imposed a fine for violation of the deadlines for CFC notifications and considered that the fine corresponded to the severity of the act, since 13 episodes were identified for different companies.
  
  In view of the above, a legal position was proposed for the taxpayer to mitigate the penalty.
  
  Tax Compliance team assisted the client in developing a legal position, identified all possible mitigating circumstances and presented arguments to the tax authority in due form.

• Result

  The tax authority accepted the arguments of the taxpayer and the penalty for each episode was reduced by 8 times.
  
  Thus, as a result of the project, tax claims of 6.5 million rubles were reduced to 812 thousand (by 5.7 million rubles or 88% of the initial claim).

• Employees involved

  Mikhail Begunov, Nikita Zharov, Andrey Solomyany

• Process description

  Under the contract, the client (the general contractor) was to receive income from the client. At the same time, the client had a payable to a subcontractor. The client was interested in setting off the counterclaims and analysing the resulting tax risks.

• Result

  As a result of the project, Tax Compliance team managed to assess potential tax risks related to the transaction for the client and suggest ways to minimise them (changing the documents on business transactions, justifying the existence of a "business purpose" of the transactions, etc.).

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The client planned to restructure intragroup indebtedness totalling more than RUB 42bn. The transaction was complicated by tax risks, as well as restrictions imposed by currency and sanctions regulations.

• Result

  The Tax Compliance team analysed currency and tax legislation as well as their application, including issues related to repatriation of funds under loan agreements, tax consequences of assignment of rights, transfer of debt, thin capitalisation rules for leasing companies and application of provisions of double taxation avoidance agreements.
  
  As a result of the project, Tax Compliance team managed to offer the client a way of carrying out a business transaction which would meet the requirements of currency legislation as well as be the least exposed to the risks of tax legislation violation (including debt transfer between the Group companies / forgiveness of debt in the framework of economic relations between the "parent" - "subsidiary" companies).
  
  In addition, the Tax Compliance team was able to identify areas of tax efficiency improvement in relation to the proposed transaction, in particular, it proposed a method of transaction that allowed avoiding tax payments under thin capitalisation rules.

• Employee involved

  Alexey Stanchin

• Process description

  The tax authority, as part of an on-site tax audit, concluded that there was a "tax optimization scheme. In particular, the tax authority believed the following: (1) the formality of the Company's relations with its counterparties; (2) nominality of the counterparties; (3) the actions of the Company and/or its counterparties led to its bankruptcy (which the inspection recognized as "fictitious"). The Tax Compliance team helped the client to elaborate a legal position supporting the possibility to apply the "tax reconstruction".

• Result

  The tax authority accepted the arguments of the taxpayer

Advising a client on obtaining the status of an accredited IT company

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Tax Compliance team was faced with the task of assessing the prospects for the client to obtain the status of an accredited IT company.

• Result

  Based on the results of the analysis, the Tax Compliance team came to the conclusion that in the current period the client does not meet the conditions established by Decree of the Government of the Russian Federation of September 30, 2022 N 1729. In addition, the Tax Compliance team developed a road map in which it outlined a possible algorithm of actions that will allow the client to apply for the status of an accredited IT company in the next period. The client's management approved the roadmap and decided to implement the Tax Compliance proposals in order to ensure the possibility to apply for the status of an accredited IT company in the next period