Cases

Based on the data of pre-inspection analysis, the tax authority opened an on-site tax audit and filed tax claims against the Client's company in the amount of 600 million rubles. The claims were related to the lack of fulfillment of obligations by counterparties with risks of nominal structures.

• Process description

  During the pre-trial stage of the dispute with the tax authorities, the lawyers proved the reality of intermediary companies: provided documentary evidence of the possibility of the counterparties to fulfill their supply obligations and the availability of appropriate material and human resources, confirmed the scheme of goods movement and transportation, collected explanations from the counterparties' employees. The lawyers contested the conclusions of the tax authorities that there was intent in the actions of the client in purchasing products from intermediaries solely for the purpose of obtaining illegal tax savings. This case resulted in additional positive pre-trial practice of challenging the decisions of the tax authorities, where there is no established scheme of withdrawal of funds for the benefit of the inspected company by minimizing the tax burden.

• Result

  The lawyers successfully challenged the act of the tax audit and reduced the tax to accrual of 10 times.

• Employee involved

  Alexey Stanchin

• Process description

  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.

• Result

  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.

• Employee involved

  Alexey Stanchin

• Process description

  Following an on-site audit, the tax authority concluded that the taxpayer had created a formal document flow to understate the tax base. In particular, the tax authority believed that: (1) the client had methodological violations under VAT; (2) the use of zinc dust in production was overstated; (3) an agency agreement was concluded with a PE for tax saving purposes.
  
  The Tax Compliance team helped the client develop a legal position to challenge the results of an on-site tax audit substantiating:
  
  (1) incorrect application by the tax authority of the methodology for determining import deductions based on the organisation's accounting policy;
  (2) the use of zinc dust in production;
  (3) the existence of a business purpose in concluding the agency agreement.

• Result

  The tax authority partly accepted the taxpayer's arguments and the tax claim was reduced by 46%.

• Employees involved

  Mikhail Begunov, Alexander Dmitriev, Nikita Zharov

• Process description

  The tax authority conducted an on-site audit of the client for all taxes and levies for a three-year period. As a result of the on-site tax audit, the auditors made claims on transactions with a number of counterparties. In the tax authority's view, the client had recorded business transactions with 7 technical entities in breach of Article 54.1 of the Tax Code.
  
  Tax Compliance specialists helped the client to successfully complete an on-site tax audit. In particular, in the course of the project the Team:
  
  (1) helped develop a legal position as part of the preparation of objections to the act;
  (2) represented the client in the meetings with the tax authorities;
  (3) accompanied the client in the framework of additional tax control measures.
  
  Due to the team's assistance, the testimony of the general director of one of the disputed counterparties was admitted into the tax audit file. The CEO's testimony helped convince the auditors that all of the client's business transactions with one of the disputed counterparties were real.

• Result

  The tax authority's additional charge was reduced by 40%.

To dispute the claims of the tax authority on the improper use of tax credits for VAT.

• Duration

  June 2019 - December 2019

• Employees involved

  Mikhail Begunov, Alexander Dmitriev

• Process description

  Additional tax control measures were taken. Evidence of the absence of interdependence with suppliers of equipment was presented. The price of the purchased equipment is indicated to be corresponding to the market level. All established violations concerned beneficiaries-importers of the supplied products, rather than the taxpayer.

• Result

  Claims of the tax authority were disputed. A positive practice was formed on additional payments to companies that supply imported equipment through a chain of suppliers