The reality of subcontractors' activities was proved and the claims of the tax authority were withdrawn.
December 2018 - April 2019
Alexander Dmitriev, Yulia Pavlova
With the help of additional tax control measures, the reality of subcontractors' activities was proved. The absence of intent in the client's actions was proved. The tax authority calculated tax liabilities without primary documents.
Claims of the tax authority on the field inspection report were appealed and withdrawn. A positive pre-trial appeal against the acts of the tax authorities in favor of the taxpayers under 54.1 of the Tax Code was formed.
Support of the client in appealing to the Central Office of the Federal Tax Service of Russia against the decision of the tax authority on the issue of bringing to responsibility for willful non-payment of taxes
Mikhail Begunov, Nikita Zharov
The tax authority based on the results of a tax audit held the taxpayer liable for non-payment of taxes. On appeal, the superior tax authority accepted some of the taxpayer's arguments, but refused to take into account certain mitigating circumstances in order to reduce the amount of penalties. The Tax Compliance team helped the client develop a legal position for submission to the Central Office of the Russian Federal Tax Service.
The Central Office of the Federal Tax Service accepted the arguments of the taxpayer. In particular, certain mitigating circumstances were taken into account. As a result, the amount of penalties was reduced fourfold.
Preparation of a legal position confirming the reality of delivery of goods by a subcontractor
Confirmation of the actual size of the client's tax liabilities due to the tax reconstruction procedure.
Mikhail Begunov, Yulia Pavlova
According to the results of an on-site tax audit, the tax authority points to the creation of a fictitious document flow with subcontractors engaged in order to acquire, in fact, goods (building materials), while overstating the cost of construction and VAT deductions. The amount of tax arrears is calculated from the full amount of the transaction on financial and economic relations with the disputed counterparties. As a part of support of additional tax control measures we rendered services on preparation of legal position for tax reconstruction in order to calculate the actual tax liabilities of the client. The primary documents confirming the client's expenses on purchase of materials used in construction of the facilities were submitted to apply the computational method of tax liabilities determination.
As a result of successfully developed legal position at the stage of support of additional measures of tax control it was possible to reduce the amount of additional tax charges in the amount of not less than 3 billion rubles.
Challenging the results of an on-site tax audit of a Russian general contractor
As part of an on-site tax audit, the tax authority concluded that the client, a general contractor for construction work, was affiliated with a counterparty.
In particular, the tax authority believed that:
(1) the transaction with the counterparty was not real
(2) The counterparties had no sources of VAT refunds as well as the necessary material and technical resources for performance of the work undertaken.
In view of the above, the Tax Compliance team offered to prepare "defensive" documents and evidence of good faith of the taxpayer.
We helped the client develop a legal position confirming:
(1) the reality of performing construction and installation works by the disputed companies
(2) the lack of controllability between the participants of the contractual relations
(3) the unreasonableness of allocating the VAT gaps to the disputed counterparties.
The claims were appealed to the tax authority and to a higher authority.
As part of a pre-trial appeal, the tax authority accepted the taxpayer's arguments and reduced the size of the claim, and then we secured a full reversal from the higher tax authority.
Preparation of a legal position confirming the reality of freight forwarding services
The tax authority in the framework of an on-site tax audit came to the conclusion that the taxpayer used technical links for the purposes of obtaining tax profits on VAT and income tax. In particular, the tax authority believed that: (1) in fact the provision of services took place directly from organizations that apply special tax regimes (without VAT); (2) the taxpayer and the counterparty are related business entities. In view of the above, the taxpayer was invited to dispute the technical nature of the disputed counterparties. The Tax Compliance team helped the client to elaborate a legal position which confirmed: (1) lack of controllability between the participants of the contractual relations chain; (2) economic feasibility of the transaction; (3) the reality of financial and economic activities of the disputed counterparties.
The tax authority accepted the arguments of the taxpayer