• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The client purchases certain goods from suppliers, on the sale of which the suppliers apply a reduced rate of VAT. The client subsequently sells these goods as part of its own business activities, subjecting them to a VAT rate of 20%.
  
  The client was interested in analysing the possibility of applying a reduced VAT rate when selling the said goods, as well as the mandatory legal requirements that the client needs to comply with in order to achieve the said objective.

• Result

  As a result of the project, the Tax Compliance team managed to assess tax risks associated with the application of the reduced VAT rate for the Client and to suggest ways to minimize them.
  
  In particular, in the course of the project Tax Compliance specialists: (1) analyzed documentation relating to the products sold by the client; (2) developed proposals on changing the document flow in order to apply the reduced VAT rate.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  A client provides IT services for a parent company. The company believed that the IT services provided to the parent organisation may not comply with the provisions of the Russian Tax Code for the application of tax exemptions. The company contacted Tax Compliance in order to assess the possibility to apply tax exemptions.

• Result

  The Tax Compliance team as a result of the project: (1) analysed the client's intercompany agreements to determine the validity of tax exemptions for IT companies; (2) developed proposals to adjust agreements and primary documentation to ensure their compliance with tax legislation.

Claims of the tax authority to have "unscrupulous contractors" in the chain of subcontractors were disputed.

• Duration

  December 2018 - April 2019

• Employees involved

  Alexander Dmitriev, Yulia Pavlova

• Process description

  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.

• Result

  Claims of the tax authority on the field inspection report were appealed and withdrawn.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.

Reduced the amount of damage by six times and achieved the termination of the criminal case

• Employees involved

  Mikhail Begunov, Alexander Dmitriev, Yulia Pavlova

• Process description

  At the stage of pre-trial appeal of the tax authorities' decision, the law enforcement officers included in the audit, without waiting for the completion of the tax audit, forwarded the collected materials to the investigating authorities for initiation of a criminal case under part 2 article 199 of the Criminal Code. The criminal case was brought against the CEO and an unidentified group of people from the company's management. The amount of damage, according to the tax and investigative authorities amounted to more than 500 million rubles.

• Result

  In accordance with the correctly built strategy of defense in the investigation of the criminal case and as a result of additional measures of tax control, lawyers and employees of Tax Compliance provided documents on "tax reconstruction", disclosed the real tax liabilities, as well as conducted an examination of the costs of transporting goods, which allowed to reduce the damages to 80 million rubles and termination of the criminal case on the fact of absence of corpus delicti in connection with the payment of arrears.

Services were rendered to the beneficiary of a construction company for retrospective disclosure of information on participation in a controlled foreign company and on the existence of bank accounts opened outside the Russian Federation.

• Employee involved

  Yulia Pavlova

• Process description

  At the time of drawing up and submission of notifications to the tax authorities the statute of limitations under p. 1 of Article 129.6 of the Tax Code had not expired, i.e. the client still had the risk of tax liability for untimely disclosure of information about the CFC. In order to exclude tax liability for failure to submit CFC notifications for previous tax periods, the client was provided with services to prepare a special tax declaration allowing to apply the tax amnesty under the Federal Law of May 29, 2019 № 110-FZ within the voluntary declaration of their assets. Also within the framework of the project we assessed the grounds for the absence of an individual's obligations to withhold personal income tax from the profit of a CFC.

• Result

  As a result of legal defense, tax liability and penalties for late submission of CFC notifications due to the application of tax amnesty provisions were avoided

It has been proven that the adoption of interim measures will not upset the balance of public and private interests and will allow the client to continue to conduct its business.

• Employee involved

  Mikhail Begunov

• Process description

  The client, with the support of Tax Compliance, applied to court for suspension of the tax authority's decision based on the results of an on-site tax audit. Enforcement of that decision could have caused considerable damage to the company and paralyzed its activity, taking into consideration the substantial amount of tax charges that could have been critical for the client's business.

• Result

  We managed to work out a convincing legal position, based on which the court took interim measures. Representatives of the tax authority appealed the interim measures, but thanks to the efforts of our lawyers the court ruling was upheld, despite the fact that according to statistics less than 37% of applications for interim measures are satisfied by the courts.

The tax authority's position on the application of price adjustments between parties to a financial and economic transaction has been appealed as part of the tax audit of transfer pricing.

• Employee involved

  Mikhail Begunov

• Process description

  Price adjustment would have entailed an additional charge of income tax on the formed tax base based on the market prices of the transaction. The project developed a legal position indicating that the formed pricing corresponds to the market level, because the calculation of the cost of the taxpayer's goods contains production costs, economically justified in terms of the type of activity.

• Result

  As a result of the successful legal defense, additional tax assessments in the amount of 280 million ₽ were avoided.

Cancelled the decision of the tax authority to hold the taxpayer liable under paragraph 3 of Article 122 of the Tax Code ("willful" failure to pay taxes).

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  Based on the results of a tax audit, the tax authorities brought the taxpayer to liability provided for in Paragraph 3, Article 122 of the RF Tax Code ("willful" failure to pay taxes / 40% fine). Tax Compliance team helped the client develop a legal position according to which the tax authority had no grounds for qualification of the taxpayer's actions as "intentional".

• Result

  The higher tax authority accepted the arguments of the taxpayer. In particular, the qualification of the tax offense was changed and additional mitigating circumstances were taken into account. As a result, the penalties were reduced by 87%. The economic effect for the client was 7.5 million ₽.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  Due to the imposed sanctions, "unfriendly" participants in a Russian company were planning to sell a business in Russia. The potential buyer of the business was a Russian retailer. The client was interested in analyzing tax risks, currency and anti-sanctions restrictions in relation to a potential transaction to acquire a business from unfriendly residents.

• Result

  The Tax Compliance team at the end of the project: (1) analyzed the application of anti-sanctions and currency regulation acts; (2) identified and described tax risks associated with the implementation of the transaction; (3) developed a plan for the implementation of the transaction taking into account all risks and restrictions.

Initially, the client set the task of structuring transactions between interdependent persons within a group of companies

• Duration

  2019

• Purpose

  As a result, successful structuring and tax planning efforts eliminated risks in excess of 80 million ₽.

• Employee involved

  Yulia Pavlova

• Process description

  In the course of structuring the transactions, risks in terms of price thresholds between interdependent companies within the group were established, regulations and additional rules were developed and implemented by all companies of the group to justify the correct application of prices when selling products within the group, as well as to support the feasibility of transactions between them.

• Result

  As a result, successful structuring and tax planning efforts eliminated risks in excess of 80 million ₽.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  When selling products, the customer uses a customer loyalty bonus program. Under the said loyalty program customers accumulate bonuses, with which they can later pay up to 100% of the cost of purchased products. The client was interested in the analysis of tax risks and procedure of registration of cash receipts in case of full payment of the cost of production by purchasers with bonuses.

• Result

  As a result of the project realization Tax Compliance team managed to assess tax risks related to VAT and income tax for the Client and to suggest the ways of their minimization. In particular, in the course of the project Tax Compliance specialists: (1) analyzed the Client's loyalty bonus program; (2) developed proposals to minimize the risks associated with the recognition of such sales of goods for bonuses as a gratuitous one.

• Employees involved

  Alexander Dmitriev, Alexey Stanchin

• Process description

  A taxpayer turned to the Tax Compliance team as part of a consultation on minimizing tax risks. In particular, work was done on: (1) advising the client on the correctness of tax accounting (2) advising on the field tax audit; (3) interaction with the tax authority during the tax audit; (4) justification before the tax authority of the principles of accounting policy applied by the taxpayer. In connection with the above, the taxpayer was offered an action plan for interaction with the tax authority. The Tax Compliance team helped the client to develop a legal position confirming: (1) the reality of transactions; (2) the validity of the absence of additional income tax charges; (3) justify the need for additional VAT charges on tax "gaps".

• Result

  The tax authority accepted the taxpayer's arguments. The tax claim of 385 million ₽ was reduced to 46 million ₽ as a result of the project. Which is 12% of the original claim of the tax authority.

The reality of the activities of subcontracting organizations was proved and the claims of the tax authority were removed

• Duration

  February 2023 - May 2023

• Purpose

  Challenge the tax authority's claims that the company used "unfair counterparties" in a chain of subcontractors.

• Employees involved

  Mikhail Begunov, Ivan Tsvetkov

• Process description

  A tax authority refused to take into account VAT expenses and deductions in respect of a taxpayer's relations with several counterparties. Taks Compliance specialists have developed a position which provides for both a full appeal against additional tax assessments on several episodes and the application of "tax reconstruction".

• Result

  Arguments and arguments formed for the taxpayer were accepted by the tax authority. Tax claims were reduced by 80%: by more than 410 million rubles.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The tax authority sent a Russian branch of an international engineering group a request for documents and information. The auditors analyzed the intra-group transactions of the Russian branch. In order to assist in preparing a response to the request, the Client contacted Tax Compliance specialists.

• Result

  As a result of the project, the Tax Compliance team: (1) analyzed the documents and information requested by the tax authority; (2) drafted a timely response to the tax authority's request; (3) described the client's tax risks in relation to intra-group services.

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

Recommendations were prepared for the client regarding the procedure for separating the IT-function within the Group, and the tax risks associated with such a reorganization were analyzed.

• Purpose

  The client decided to separate the IT function within the Group into a separate organizational structure. Our team was tasked with determining the tax treatment to be applied by the new IT company, as well as preparing recommendations to mitigate tax risks that could arise in connection with the reorganization.

• Employee involved

  Nikita Zharov

• Process description

  As a result of the analysis, the team prepared recommendations for the client on the most appropriate tax regime for the new structure, as well as developed proposals aimed at managing the tax risks associated with the reorganization.

• Result

  As a result of the analysis, the team prepared recommendations for the client on the most appropriate tax regime for the new structure, as well as developed proposals aimed at managing the tax risks associated with the reorganization.

Analysis of the client's business structure for the possibility of applying the tax benefits provided for in the IT maneuver

• Purpose

  The Tax Compliance team had the task of analyzing certain types of business transactions for the possibility of applying VAT and income tax benefits.

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  Analysis of individual business transactions for their compliance with the conditions for the application of VAT exemption and accounting for the purpose of 90% threshold of income from IT-activities was carried out.

• Result

  Based on the results of the analysis, Tax Compliance team has come to the conclusion that the business operations of the client comply with the conditions stipulated by Articles 149 and 284 of the Tax Code of the Russian Federation; recommendations on the improvement of the internal document flow in the company have been prepared as well. As a result, the client decided to start applying the tax benefits provided for by the IT maneuver.

Tax Compliance lawyers successfully defended the interests of the client in a dispute with the tax inspectorate, which resulted in a significant amount of additional tax charges being declared illegal and the company's accounts not being debited.

• Process description

  The client petitioned the court to invalidate the tax authority's decision based on the results of the on-site tax audit, according to which he had been charged with substantial amounts of NGOs and VAT, as well as related penalties and fines in the amount of over 3 billion rubles. Most of the claims were related to expenses for logistics services, because the tax authority suspected that they were of a fictitious nature. Enforcement of this decision could have caused significant damage to the company and paralyzed its operations (given the significant amount of tax charges that could have been critical to the client's business).

• Result

  Thanks to professionalism of Tax Compliance lawyers we managed to choose the right line of defense, based on which the court of the first instance partially upheld the client's claims (most of additional tax charges were declared illegal). It also set an important precedent and resulted in positive arbitration practice of annulling tax authorities' decisions. This case supported the approach according to which the taxpayer should not be held liable for the actions of third parties. According to independent experts, the dispute may be of great importance for the practice of application of Article 54.1 of the Tax Code in general and, in particular, for large taxpayers who make extensive use of the services of third-party transportation and logistics companies, such as those operating in the FMCG sector. In addition, interim measures were obtained in this dispute, which allowed the company to stay afloat until the resolution of the dispute on the merits (preventing the debit of funds from the company's accounts).

The client has decided to reduce the areas of business, due to lack of liquidity.

• Purpose

  Analysis of activities and development of a detailed action plan and measures to minimize risks in the liquidation of intra-holding companies

• Employee involved

  Alexander Dmitriev

• Process description

  The Austrian company had a number of subsidiaries on the territory of Russian Federation, engaged in sales, warranty services and development of technical documentation for ship equipment. Due to the recession of economic activity and purchasing power of business, the company decided to reduce its presence on the Russian market and made a decision to close a number of directions.

• Result

  After an in-depth analysis of financial and economic activities of companies and assessment of risks a detailed plan describing all stages of liquidation of legal entities was drawn up. One of the stages was the reconciliation of mutual settlements with intra-holding companies and withdrawal of the parent company from the Austrian jurisdiction. There was also a plan for the transfer / dismissal of more than 150 employees of the liquidated legal entities. Translated with www.DeepL.com/Translator (free version)

Client was involved in a case for subsidiary liability for the obligations of a debtor in liquidation as a defendant

• Purpose

  Representing a former manager of a company in arbitration court in a case for bringing him to subsidiary liability

• Employee involved

  Andrey Solomyany

• Process description

  Bankruptcy trustee claimed vicarious liability of the former CEO and participant of the company in liquidation on the grounds that the transactions had caused substantial harm to the property rights of the creditor and failure to fulfill the obligation to apply to the court for bankruptcy of the company headed. Tax Compliance experts developed a defense stance substantiating the absence of grounds for bringing the Client to subsidiary liability and refuting the applicant's arguments

• Result

  The court refused to bring the company's general director to subsidiary liability because of an absence of evidence of the corpus delicti in the actions of the debtor's former general director

The client is interested in the analysis of potential risks of bringing individual individuals to subsidiary liability

• Duration

  Preparation of an expert opinion with an assessment of the risks of subsidiary liability

• Purpose

  Preparation of an opinion with an analysis of the risks of bringing individuals to subsidiary liability for the company's obligations and possible mechanisms to reduce these risks

• Process description

  An on-site tax audit was conducted in relation to a construction company. The transactions with "unscrupulous" counterparties were the subject of the audit. The client contacted Tax Compliance to assess the risks of bringing individuals who participated in the management of the audited company to subsidiary liability and possible actions to mitigate these risks

• Result

  After analyzing the documents and information provided, Tax Compliance consultants prepared an expert report describing the risks of bringing the interested individuals to subsidiary liability for the obligations of the company subject to a field tax audit, as well as recommendations for specific steps to mitigate such risks.

Tax Compliance lawyers appealed against the act of tax audit and prepared a legal position, which resulted in the reduction of additional tax charges by 80%.

• Process description

  An on-site tax audit was conducted with respect to the Client, as a result of which the tax authority charged the taxpayer with fictitious document turnover with three vendors, rendering services of advertising on TV channels (RBC-TV, Channel 8, Good Cinema, World Business Channel) and radio stations (Radio Energiya MO 103.5 FM, Europe Plus MO 90.5 FM, Avtoradio MO, Humor FM, Megapolis FM, Retro FM, Nashe Radio, BEST FM, Kommersant FM). The project was complicated by the fact that the analysis showed no direct money transfers from the Client to the TV channels and radio stations. To prove the cost of advertising an expert audit was conducted to determine the actual tax liabilities of advertising services purchased by the company directly from TV channels and radio stations on the basis of primary documents (broadcasting statements), taking into account the terms of the contractual relationship with the disputed counterparties.

• Result

  Tax Compliance lawyers appealed the act of tax audit and prepared a legal position that resulted in the reduction of additional tax charges based on the results of the field tax audit by 80%. As part of the appeal of the audit results the mechanisms of tax reconstruction calculation were applied to reduce the amounts of arrears, taking into account the actual expenses of the company. This approach may be used when declaring expenses of oil companies.

The Court of Appeal refused to consider the appeals of individuals against the decision of the Arbitration Court of Moscow, in which these individuals were listed as the founders of the organization and recognized as the organizers of the "scheme" aimed at tax evasion

• Purpose

  Preparation of the legal position of the cassation appeal in relation to the circumstances surrounding the refusal of the court of appeal to accept complaints from individuals brought to subsidiary liability

• Employee involved

  Andrey Solomyany

• Process description

  The Moscow Arbitration Court issued a ruling rejecting the taxpayer's claims to invalidate a non-normative legal act of the tax authority. In its reasoning, the court concluded that a number of individuals were involved in the organization, as well as the creation by them of a "scheme" of tax evasion by the company. Subsequently, the above conclusions of the court served as the basis for the tax authority to apply to the court for bringing the individuals to subsidiary liability. On the basis of the circumstances described by the court of first instance, the physical persons have prepared and sent to the court an appeal in rebuttal of the conclusions of the court of first instance. The court of appeal refused to consider the appeal of individuals and terminated proceedings on them motivating its determination by the fact that the appealed judicial act does not directly affect the legal rights of the appellant and does not impose on it unlawful duties.

• Result

  The individuals filed a cassation appeal in which they disclosed the circumstances that affected the court's ruling to bring them to subsidiary liability based on the judicial act of the court of first instance. Based on the results of consideration of the cassation appeal, the court sent the case for a new review to the court of appellate instance. The court found that the findings of the trial court affected their legal rights by virtue of their subsidiary liability under another court case.

Recommendations on accounting of transactions for issuing electronic gift cards to customers for tax purposes were prepared

• Purpose

  Analysis of tax risks associated with the transfer of gift cards to customers

• Employee involved

  Nikita Zharov

• Process description

  The team was tasked with analyzing the income tax and personal income tax risks that may arise from the transfer of electronic gift cards to customers.

• Result

  As a result of the analysis, proposals were developed aimed at managing tax risks in the transfer of gift cards to customers

The Federal Tax Service has decided to reduce the amount of penalties for non-payment of taxes

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  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.

• Result

  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.

The company incorrectly calculated and paid SIF contributions for three years

• Purpose

  Return overpaid insurance premiums

• Employee involved

  Anna Karpova

• Process description

  The company incorrectly calculated and paid Social Insurance Fund contributions for three years. The company's specialists audited personnel documents, as well as all tax returns and payments to the funds.

• Result

  Tax Compliance specialists conducted a tax and personnel audit, restored personnel documents for three years and prepared revised tax returns. As a result, more than 30 million rubles of overpaid insurance premiums were returned from the budget.

The tax authority has sent an information letter to encourage the taxpayer to adjust the tax base for VAT and make an additional payment to the budget of 80 million ₽.

• Duration

  2019

• Employees involved

  Mikhail Begunov, Alexander Dmitriev

• Process description

  In the course of tax audit of problematic counterparties, real tax risks in terms of relationships with suppliers were established, which amounted to 15 million ₽. In the other part of the requirements of the tax authority were not proved: the organization provided the primary documents with the substantiation of the reality of supplies, as well as the documents on full reflection by the suppliers of the amounts of proceeds from sales in VAT declarations, and their contact information.

• Result

  As a result of a successful tax audit, the organization independently adjusted the tax base for VAT and paid 15 million ₽ on their own. This allowed avoiding field tax audits and additional penalties.

A business model was proposed and implemented to reduce the amount of insurance premiums.

• Purpose

  Reduce insurance premiums and structure assets

• Employee involved

  Anna Karpova

• Process description

  A business model was proposed and implemented where the company is organized in the form of a production cooperative. The members of the production cooperative do not receive a salary, but a share of the net profit; these payments are not subject to insurance premiums according to the current tax legislation.

• Result

  As a result of the introduction of the production cooperative, transactions within the holding company were structured, resulting in a reduction in insurance premiums of more than 20% of the annual payroll.

There was no interaction structure within the group of companies. It took 5 employees and a long period of time to generate management reports and accounting sets of documents.

• Purpose

  Set up and automate internal accounting and management accounting between group companies

• Employee involved

  Anna Karpova

• Process description

  The client set a task to set up and automate internal accounting and management accounting between the companies of the group. Initially, there was no structure of interaction between departments and in general between the companies of the group, for the formation of management reports and accounting set of documents involved 5 people and required a long period of time.

• Result

  The specialists of our company have developed reporting forms, set up a chain of interaction between employees of the organizations in the group, reduced the number of employees involved in the formation of all the necessary reports to 2 people. Accounting set of documents is formed automatically due to the introduction of external processing to the program 1C

The Federal Tax Service inspected the client and assessed additional VAT and income tax. Tax Compliance experts managed to reduce the additional charges by 85%.

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  The tax audit was carried out in respect of the Client; as a result of it the tax authority decided to assess additional VAT and profit tax on the relations with the controllable transit counterparty created for the purpose of artificial document flow in order to withdraw money for uncontrolled turnover through the one-day companies. The lawyers contested the decision of the tax authorities, worked out a legal position that allowed calculating and documenting the Client's actual expenses related to the purchase of goods, and successfully initiated an independent expert evaluation of the market value of transportation expenses included in the surcharge on goods from the transit counterparty.

• Result

  The amount of charges was reduced by 520 million rubles, or 85% of tax claims. Lawyers formed the law enforcement practice under Article 54.1 of the Tax Code of the Russian Federation in terms of real tax liabilities ("reconstruction of VAT and income tax").

The field tax audit period was disputed.

• Duration

  June 2019 - December 2019

• Employee involved

  Mikhail Begunov

• Process description

  The tax authority appointed a field audit after the company's reorganization started, although the field audit partially covers the periods of previous audits. An appeal was lodged to a higher tax authority. The field tax audit was reversed.

• Result

  We cancelled the results of the field tax audit for the previously inspected period. There is a positive practice of pre-trial appeal against the decision of tax authorities to appoint an on-site tax audit for the same tax period in case of its appointment in connection with the reorganization or liquidation of the company under Article 89 of the Tax Code.

Claims of the tax authority were partially eliminated. Claims of the tax authority on the involvement of "unscrupulous counterparties" were withdrawn.

• Duration

  October 2019 - March 2020

• Employees involved

  Mikhail Begunov, Alexander Dmitriev

• Process description

  With the help of additional tax control measures, the reality of subcontractors' activities was proved. The absence of intent in the actions of the client and lack of affiliation with suppliers, which partially confirmed the disputed shipments, was proved.

• Result

  Claims of the tax authority for the field inspection report were appealed and partially withdrawn. Positive pre-trial appeal against the acts of tax authorities in favor of taxpayers under 54.1 of the Tax Code was formed.

Tax Compliance attorneys advised a petroleum products company on the tax risks of calculating and paying excise tax on petroleum products over a three-year period.

• Process description

  The Client was under the threat of a field tax audit and additional tax charges if the company did not voluntarily submit revised excise tax returns and did not pay the tax and penalties. The lawyers evaluated the materials of tax authorities, available judicial practice, and clarifications of the Ministry of Finance and Federal Tax Service. As the result our lawyers reasoned to the Client that voluntary tax payment is more efficient for the Client than an on-site tax audit and further litigation in courts, including the fact that the amount of taxes to be paid voluntarily would be considerably smaller. Tax Compliance attorneys developed a new approach to the application of the letter of the Ministry of Finance and prepared a legal position to substantiate the advisability of independent calculation of tax liabilities of the Client on excise taxes and their voluntary payment to the budget, due to changes in the approach of the Russian Federal Tax Service in terms of charging excise taxes when mixing oil products, as well as the current negative judicial practice on this topic.

• Result

  The client prepared a refined tax return and completed the tax calculations. We managed to avoid penalties and fines of more than 190 million rubles.

• Purpose

  Development of legal position substantiating the purpose of reorganization / liquidation of some enterprises. As part of the pre-inspection analysis, the participation of Tax Compliance attorneys in interrogations of directors and employees of companies and submission of documents upon request

• Employee involved

  Alexander Dmitriev

• Process description

  A client who owns a chain of restaurants on the territory of the Russian Federation applied to the company for the reorganization / liquidation of some of the enterprises most affected by the worsening situation due to the spread of a new coronavirus infection. After notification of the tax authorities about the beginning of the reorganization / liquidation procedure, the client received requests for documents on financial and economic activities of the enterprises as part of the pre-inspection analysis

• Result

  As a result of pre-inspection analysis not a single legal entity was not assigned to an on-site tax audit. The client subsequently turned to TAX COMPLAENS LLC to support the reorganization / liquidation of companies.

• Purpose

  Settlement of debts to the budget as part of settlements with non-budgetary funds. Extend the period of voluntary liquidation through the court. To complete voluntary liquidation

• Employee involved

  Alexander Dmitriev

• Process description

  TAX COMPLAENS was approached by the owner of a large hotel complex, who received a decision to refuse to register a liquidation balance sheet and make an entry in the Unified State Register of Legal Entities on the termination of the company in connection with liquidation. The reason for the decision to refuse the existence of unfulfilled obligations to non-budgetary funds, namely the Pension Fund of the Russian Federation. After analyzing the reasons for the refusal it was discovered that the company was in debt to the amount of 5 million rubles, but there was no information on the debt in the personal accounts submitted to the tax authority by the Pension Fund. In connection with the fact that the company submitted the documents to the registration authority 11 months after the start of liquidation and received the refusal to register the specialists of LLC "TAX COMPLAENS" applied to the court for the extension of the voluntary liquidation by 6 months

• Result

  As a result of interaction of specialists of "TAX COMPLAENS" Ltd. with tax authorities and the Pension Fund all necessary actions to correct unreliable information about debts to the budget were taken and the legal entity ceased its activities by excluding it from the Unified State Register of Legal Entities as a result of voluntary liquidation.

The tax authority revealed violations of tax laws on relations with suppliers and charged the company with the appropriate mandatory payments

• Purpose

  Appealing the decision of the tax authority on the field tax audit of the relationship on the supply of raw materials with certain counterparties

• Employee involved

  Mikhail Begunov

• Process description

  According to the results of the second field tax audit in connection with the violation of the rules of Art. 54.1 of the Tax Code, the company was charged a significant amount of additional taxes and penalties in terms of transactions for the supply of raw materials concluded with several counterparties. During the trial, the court was presented with evidence of the uniqueness of the raw materials purchased from the disputed counterparties and their actual use in production, the circumstances of the conclusion and execution of transactions by the disputed counterparties, as well as the availability of material and labor resources in sufficient volume.

• Result

  The legal position developed by our specialists made it possible to appeal against additional tax charges of 117 million rubles on several counterparties. The court decision to invalidate the results of the field tax audit in this part was upheld in courts of appellate and cassation instances. The client was able to use the position developed to challenge the actions of the tax authority in the framework of field audits for other tax periods in respect of the same counterparties.

The client was provided with services to support an on-site tax audit and development of a legal position to confirm the costs of logistics services of unfair counterparties.

• Purpose

  Elimination of tax risks of understatement of the tax base for VAT and income tax

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  A large distribution company sought legal assistance to develop a legal position justifying the involvement of disputed logistics companies. The tax authority disputed the reality of providing logistics services because the goods were not stored in the warehouses stated in the primary documents with the counterparties, including the tax authority found the controllability of the involved logistics companies and the lack of sufficient manpower to provide services to the client. As a part of audit support services were rendered for preparation of answers to demands of tax authorities for clarification and documentation of actual goods movement through warehouses of separate subdivisions of the company and further transfer of goods both to logistics companies and ultimate purchasers of the client. Services were rendered to strengthen the legal position, including preparation and accompaniment of client's representatives for questioning by the tax authorities. Prepared legal position with documentary evidence of availability of material resources from counterparties to provide logistics services to the client.

• Result

  According to the results of consideration of the explanations and documents provided by the client on the actual order of execution of obligations by the disputed counterparties, it was possible to prove that the transactions concluded were not aimed at obtaining unjustified tax savings.

The client received services to support tax control measures to verify the legality of the reflection of interest on loans received from an interdependent company with a foreign interest in the expenses and to verify compliance with currency legislation

• Purpose

  Confirmation of the economic feasibility of borrowing funds from a related company in order to avoid reclassification of the transaction as payment of "hidden" dividends.

• Employee involved

  Mikhail Begunov

• Process description

  As part of the ongoing activities, the tax authority planned to schedule an audit and recognize the transaction as an actual payment of dividends to the ultimate beneficiaries and recognition of interest on loans subject to capitalization and controlled indebtedness. As part of the legal assistance provided to the tax authority, documents and clarifications were prepared to confirm the actual purpose and direction of the use of borrowed funds.

• Result

  According to the results of consideration of materials, it was possible to prove that the transaction to attract the loan funds is not aimed at misrepresenting the facts of financial and economic activity and does not imply an intent to increase the cost of the client and receive an unjustified tax benefit for income tax.

The client provided services to appeal the results of the field tax audit, the basis for the recovery of taxes was the assumption of the tax authority of the fictitious nature of the supply of equipment to some suppliers.

• Purpose

  Confirm the actual movement of goods from the importer to the customer, to confirm the absence of tax benefits in the form of overvaluation of goods.

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  As part of the on-site tax audit, the tax authority assumed the deliberate involvement of dubious counterparties in the chain of financial relationships to artificially increase the price from the importer. The developed legal position made it possible to prove that the involved counterparty imported goods in the declared volumes, which is confirmed by the information reflected in the customs declarations. Primary documents confirming the availability of goods in the client's warehouses during the audited period, as well as counterparties' expenses for the delivery of goods to the client were presented.

• Result

  As a result of successful appeal we managed to reduce the amount of additional tax charges to 83 million rubles. It was important for the client's business to challenge the additional charges based on the results of the field tax audit, as their size is substantial and in case of non-payment there is a risk of bringing the CEO of the organization to criminal liability.

The client was provided services to appeal the results of an on-site tax audit, according to the act was established the minimization of tax liabilities on the difference between the cost of works and materials supplied and the withdrawal of this difference in order to illegally cash out through the subcontracting "transit" companies.

• Purpose

  Confirmation of the actual size of the client's tax liabilities due to the tax reconstruction procedure.

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  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.

• Result

  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.

The client was provided with services to appeal the results of a field tax audit, provided legal assistance to justify the disputed supply of raw materials and reduce the amount of taxes to be recovered

• Purpose

  Confirmation of the actual size of the client's tax liabilities due to the tax reconstruction procedure

• Employee involved

  Mikhail Begunov

• Process description

  A tax audit was carried out in relation to the client, the basis for the collection of taxes was the assumption of the tax authority of the fictitious nature of the supply of raw materials for some suppliers. It was proved at the stage of objections and additional measures of tax control that it is necessary to measure quantitative indicators at the beginning and at the end of the production process. The tax authority was given the calculations for write-offs of the materials purchased from the disputed contractors and the information about the residuals of raw materials. The tax authority's claims have been partly withdrawn in relation to profits tax. The taxpayer's objections were partially satisfied in the amount of 343 mln rubles. Within the framework of the appeal to the superior body the client's claims on recalculation of tax liabilities were partially satisfied.

• Result

  A positive practice of pre-trial appealing the acts of tax authorities in respect of manufacturers of medicines is formed, taking into account the specifics of the industry. The importance of the project is to provide legal assistance to the manufacturer of vital and socially important drugs.

The client was provided with services to appeal the results of the field tax audit and preparation of documentary evidence to confirm the reality of work performed by subcontractors.

• Purpose

  Elimination of tax risks of understatement of the tax base for VAT and income tax

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  An on-site tax audit is being conducted in respect of the client, the tax authority does not confirm the performance of construction and installation works by subcontractors, since the actual performers of the works have not been identified. In the frame of legal defense and support of tax control measures we rendered services on search of factual executors of works according to materials, provided by tax authorities within the frame of on site tax audit. The procedure of tax reconstruction in view of the submitted primary documents on the actual executors of works, which were involved by the disputed subcontractors, was carried out. An information letter was sent to the tax authority in order to confirm that the client is ready to pay the tax arrears, taking into account the recalculation of the amount of unjustified tax savings before the delivery of the decision on the audit.

• Result

  Implementation of the project allowed to reduce the amount of income tax and VAT arrears

The client seeks advice on restructuring the business of three companies in order to apply the tax exemption for VAT and insurance premiums.

• Purpose

  Elimination of tax risks of unreasonable splitting of client's financial and economic activity due to redistribution of income to several organizations in order to meet the criteria for tax relief.

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  A fast-casual catering client needed to restructure its business so that each created company could apply the income tax and insurance contributions exemption. The purpose of the developed legal position was to prove the absence of interdependence between the client and the established companies, to confirm the economic independence of the activities of the established companies, to exclude the tax risks inherent in the scheme of illegal business splitting due to the conclusion of a commercial concession agreement between the participants of financial transactions.

• Result

  Implementation of the project allowed to reduce the tax burden of the client in subsequent tax periods by at least 200 million rubles per calendar year

Confirm the possibility of a VAT refund

• Purpose

  Confirmation of the actual costs of a large developer-investor to obtain a VAT refund from the budget

• Employee involved

  Mikhail Begunov

• Process description

  The client was rendered services on justification of expenses for construction of non-residential premises. As a result of support of desk audit of VAT return for refund, the tax authority established the illegality of claimed deductions in the chain of suppliers due to the lack of a source for VAT refunds. As part of the audit support, the tax authority succeeded in developing a legal position that confirmed the reality of performing the work by contractors. They also managed to prove that there were no grounds to hold the client liable for the actions of third parties for non-payment of taxes to the budget and formation of VAT gaps.

• Result

  As a result of consulting on the submission of supporting primary documents, preparation of contractor witnesses, it was possible to refund the entire claimed amount of VAT from the budget.

The client was provided with services to appeal the results of the field tax audit and preparation of documentary evidence to confirm the reality of work performed by subcontractors.

• Purpose

  Elimination of tax risks of understatement of the tax base for VAT and income tax

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  An on-site tax audit is being conducted in respect of the client, the tax authority does not confirm the performance of construction and installation works by subcontractors, since the actual performers of the works have not been identified. In the frame of legal defense and support of tax control measures we rendered services on search of factual executors of works according to materials, provided by tax authorities within the frame of on site tax audit. The procedure of tax reconstruction in view of the submitted primary documents on the actual executors of works, which were involved by the disputed subcontractors, was carried out. An information letter was sent to the tax authority in order to confirm that the client is ready to pay the tax arrears, taking into account the recalculation of the amount of unjustified tax savings before the delivery of the decision on the audit.

• Result

  Implementation of the project allowed to reduce the amount of income tax and VAT arrears

The airline sought advice on the assessment of tax risks in the restructuring of debt on purchased discounted borrowings.

• Purpose

  Exclusion of tax claims from the tax authorities, structuring the transaction according to the model of issuing preferred shares by the company and the possibility of applying Article 277 of the Tax Code when offsetting obligations.

• Employee involved

  Mikhail Begunov

• Process description

  A client of a major airline company was advised on analyzing tax risks associated with the purchase of discounted debt from credit institutions and the offsetting of debt obligations against securities.

• Result

  Legal position aimed at justification and structuring of the transaction allowed the client to exclude the possibility of tax claims on income tax, as well as to take into account the losses of previous tax periods in the expenses.

A transportation company sought advice on assessing tax risks in a transaction involving the sale of interest-bearing bonds.

• Purpose

  Structuring of tax risks and minimization of possible tax claims

• Employee involved

  Mikhail Begunov

• Process description

  A client engaged in helicopter transportation rendered consulting services for the analysis of tax risks in a transaction involving the sale of interest-bearing bonds, which resulted in a loss. Due to the fact that the securities are not traded on the organized securities market and were sold to a related party, there was a risk of additional profit tax charges when accounting for expenses on the purchase of securities.

• Result

  Implementation of the project made it possible to eliminate the probability of tax claims

A fuel company sought advice on the legality of payment of excise taxes and penalties, respectively, in connection with a radical change in the approach to the interpretation of the provisions of the Tax Code by the Ministry of Finance of Russia.

• Purpose

  Advising on the legality of the calculation of excise taxes on petroleum products in connection with the change in the approach to the interpretation of the provisions of the Tax Code of the Ministry of Finance of Russia.

• Employee involved

  Yulia Pavlova

• Process description

  The client in the conditions of the oil depot, is engaged in improving the quality of fuel. Since the client did not produce a new product, no excise tax was calculated on the product received. In 2020 the Ministry of Finance of Russia changed its position, on which a number of clarifications were issued, on the basis of which the tax authority sent the client an information letter with the proposal to clarify its tax liabilities for the past tax periods. The client requested advice on the lawfulness of calculating excise duties on petroleum products due to a change in the approach to the interpretation of provisions of the Tax Code by the Russian Ministry of Finance.

• Result

  The client developed a legal position to challenge the actions of the tax authority on the procedure for determining the object of taxation

The client received a requirement to submit documents and explanations for the period of the last three years of activity outside the scope of the audit

• Purpose

  Formation of the client's legal position at the stage of pre-inspection analysis, conducted by the tax authority for the last three years of activity.

• Employees involved

  Alexander Dmitriev, Yulia Pavlova

• Process description

  The company was approached by a client who received a request to provide documents and information for the last three years of activity outside the scope of the audit. In the opinion of the tax authority, a number of counterparties could not confirm the reality of the fulfillment of obligations under the transaction and the client had the intent to minimize the tax base when reflecting transactions in the accounting and tax registers.

• Result

  TC attorneys formed a legal position in the explanations and prepared together with the client a comprehensive package of documents confirming the reality of transactions with counterparties. The attorneys interviewed the general directors of the counterparties and ensured their appearance at the tax authority to confirm their earlier testimony.

As part of the on-site tax audit, the tax authority seized the original documents and examined the premises in order to clarify the circumstances relevant to the completeness of the audit.

• Purpose

  Representation of client's interests in the framework of inspection of warehouse and office premises. Representation of the client during the seizure of original documents as part of an on-site tax audit.

• Employees involved

  Alexander Dmitriev, Yulia Pavlova

• Process description

  At the beginning of the working day the employees of the tax authority entered the territory of the enterprise and paralyzed the work, forbidding the employees to perform their official duties. Shipment and loading was suspended due to the inability to process the necessary documentation. An employee and lawyers of TC arrived to the place of tax control measures as soon as possible and ensured legal protection of the client, having prevented disruption of production and normal functioning of the client's warehouse.

• Result

  After a conversation with the tax officials, a mutual understanding was reached and the inspection of the premises together with the seizure of documents was carried out in stages, without interfering with the production processes of the enterprise.

A client from a fuel company applied for an installment payment of taxes due to the lack of financial capacity to pay taxes in full at the request of the tax authority.

• Purpose

  Verification of the grounds for the client's tax deferral

• Employee involved

  Yulia Pavlova

• Process description

  The client was provided with services for the preparation of documentary substantiation of compliance with all the criteria for obtaining installment payments, calculated financial indicators of solvency and current liquidity to obtain installment payments due to the threat of bankruptcy risks. An analysis of the most rational way to ensure tax liabilities, depending on the value of the company's assets and, in general, the procedure for obtaining one or another type of security. Prepared documents in respect of the property of the company, acting as security for the performance of obligations to pay taxes within the period specified in the schedule of debt repayment.

• Result

  The tax authority accepted the documents and the application for installment payment, the client was given the opportunity to pay tax during the calendar year.

The client was rendered support services in the frame of on site tax audit, objections to the act of tax audit, additional materials of tax control were prepared, the basis for the recovery of taxes was the assumption of the tax authority of the technical links for the purpose of obtaining deductions for VAT and income tax.

• Purpose

  Confirm the actual provision of transport and freight forwarding services rendered to the client, to apply the reconstruction of transportation services, to confirm the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Alexey Stanchin

• Process description

  An on-site inspection was carried out in respect of the client, as a result of which additional VAT and income tax were charged on relations with controlled transit counterparties. According to the tax authority, the purchase of goods was actually carried out directly from organizations that apply special tax regimes (without VAT). As part of the legal defense developed a legal position to challenge the technical nature of the activities of the disputed counterparties, for part of the episodes was applied to the reconstruction of the income tax.

• Result

  According to the results of the developed legal position it was possible to prove the lack of controllability between the participants in the chain of contractual relations, to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.

The tax authority decided not to conduct an on-site tax audit of the taxpayer

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The tax authority, as part of its pre-inspection analysis, concluded that the taxpayer had accounted for tax purposes for business transactions with "technical" companies. In view of the above, the taxpayer was offered to adjust its tax liabilities by more than 17 million rubles. The Tax Compliance team helped the client to elaborate a legal position that confirmed: (1) the reality of business transactions with the disputed counterparties; (2) the client's "commercial" discretion before entering into relations with the disputed counterparties; (3) the reality of obligations fulfillment under transactions directly by the declared counterparties.

• Result

  The tax authority accepted the arguments of the taxpayer, and decided not to conduct an on-site tax audit against him.

The dispute with the tax authority regarding the legality of the application of a reduced tax rate at source is resolved

• Employee involved

  Nikita Zharov

• Process description

  A company applied a reduced withholding tax rate in relation to dividends distributed to a foreign shareholder. The tax authority, as part of an on-site tax audit, investigated the circumstances of the foreign organization's activities and the legitimacy of the application of the preferential provisions of the IRS. As a result of the audit, the tax authority concluded that the standard rate of 15 percent was to be applied to dividends.

• Result

  The team helped the client to successfully pass an on-site tax audit, in particular assisted in preparation of answers to tax authorities' requirements, accompanied the client during interrogations of employees and other control measures, provided methodological support to the client on arising issues. Subsequently, the team helped to form a legal position that was used by the client during the pre-trial and trial stages. As a result, the dispute with the tax authorities was successfully resolved in favor of the client in court

• Process description

  This project examined the tax risks associated with raising loans from Russian banks and the subsequent financing of companies within the group with these funds. In particular, a whole pool of risks related to accounting for tax purposes of specific bank commissions (payments for opening a "credit line", etc.), potential reclassification of transactions and others was analyzed. (The project was implemented by an employee before joining Tax Compliance)

• Result

  The client received a detailed explanation of the tax consequences, risks and ways to minimize them.

Increased efficiency of internal control system for the client's selection and interaction with counterparties

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Tax Compliance team was tasked to analyze the client's internal control system for the risks of entering into/interacting with "technical" companies. The project analyzed: (1) internal documents of the client; (2) the client's approach to audit activities in relation to potential / existing counterparties; (3) the functionality of the client's responsible employees.

• Result

  The Tax Compliance team identified ineffective areas of the internal control system and prepared recommendations aimed at reducing the risks of entering into business relationships/interactions with "technical" companies.

Tax Compliance team carried out a health-check of client's business activities for the presence of tax risks

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Tax Compliance team had the task to perform an express analysis of the client's business activities to check the presence of tax risks. The project successfully applied the model of "risk-oriented" approach that implies checking the areas of the Company's business activities most exposed to tax risks (income tax and VAT).

• Result

  Based on the results of the analysis, the Tax Compliance team has identified certain business transactions that are the most associated with tax risks and developed a set of measures aimed at reducing them.

The tax authority decided not to conduct an on-site tax audit of the taxpayer

• Employee involved

  Nikita Zharov

• Process description

  As part of the pre-inspection analysis, the tax authority concluded that the taxpayer had accounted for tax purposes for business transactions with a "technical" company. In view of the above, the taxpayer was invited to conduct an independent analysis of tax risks and (if necessary) to adjust its tax liabilities. The team analyzed business transactions with the disputed counterparty for tax risks and subsequently helped the client to prepare a response to the request of the tax authorities and collect the evidence, confirming: (1) the reality of business transactions with the disputed counterparty, (2) the reality of the obligations under transactions directly claimed by the counterparty, (3) the counterparty has no attributes of "technical" company for tax purposes.

• Result

  The tax authority accepted the arguments of the taxpayer, and decided not to conduct an on-site tax audit against him.

Recommendations were prepared to change the structure of economic relations within the Group in order to comply with the requirements of Article 54.1 of the Tax Code of the Russian Federation

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The team had the task to analyze the nature of the Group's activities for the risks of imputing the scheme of "splitting" the business. The team analyzed: (1) circumstances of business entities within the Group in terms of meeting the conditions for the application of special tax regimes; (2) circumstances of creation of certain business entities; (3) specifics of business relationships within the Group.

• Result

  Based on the results of the analysis, the risks of qualifying the nature of the Group's activities as a "split" business scheme were identified and recommendations for changing the structure of business relationships within the Group were developed.

Various jurisdictional options for the holding company within the Group are proposed

• Employee involved

  Nikita Zharov

• Process description

  The team was tasked with selecting the best jurisdiction for the holding company within the Group. The team analyzed various jurisdictions for opportunities to create / relocate a holding company within the Group. As part of this analysis, including the possibility of redomiciliation of the business in the ATS was considered.

• Result

  As a result of the analysis, the client was offered various jurisdictional options for the holding company within the Group.

• Process description

  The client asked to analyze the current structure of the group of companies and identify key tax risks. Based on the results of this analysis, a decision was made to change the structure of the group of companies. The specialist prepared a target structure and a detailed transition plan. (The project was implemented by the employee before joining Tax Compliance)

• Result

  The client received the most efficient and manageable group structure, free of historical tax risks and with a number of tax advantages.

Confirm the possibility of a VAT refund

• Purpose

  Services were rendered to confirm the actual costs of the shared participant in the construction of non-residential premises

• Employee involved

  Mikhail Begunov

• Process description

  A legal entity, a shareholder of non-residential premises construction, applied for legal assistance on VAT refund from the budget on invoices issued by agency method through the developer of the construction. The builder had been deducting invoices for a long period of more than 5 years and reissued them to the client. As part of the audit support, we were able to develop a legal position confirming the reality of work performed by the developer's counterparties, including the validity of VAT refunds from the budget on invoices beyond the three-year period.

• Result

  As a result of consulting on the submission of supporting primary documents, preparation of contractor witnesses, it was possible to refund the entire claimed amount of VAT from the budget.

The client provided services to appeal against the results of a field tax audit, the basis for the collection of taxes was the assumption of the tax authority of the fictitious nature of the transaction to increase the price of goods

• Purpose

  Confirm the actual movement of goods from importer to customer, confirm the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Mikhail Begunov

• Process description

  An on-site audit was carried out in relation to a client, as a result of which additional VAT and profits tax were charged on relations with a controlled transit counterparty. According to the tax authority, the actual purchase of goods was carried out directly from a foreign supplier. As part of the legal defense, a legal position has been developed to calculate and document the actual expenses of the Company on the acquisition of goods based on the price set by the foreign counterparty, as well as costs associated with the transportation of goods. Due to the absence of primary documents, the Company initiated an independent expert assessment of the market value of transportation and other direct expenses included in the markup of goods from the disputed counterparties.

• Result

  According to the results of the developed legal position it was possible to prove the lack of controllability between the participants in the chain of contractual relations, to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.

Settled a dispute with the tax authority on the legality of accounting exchange rate differences for income tax purposes

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Company was accounting for profit taxation purposes for income/expenses in the form of exchange rate differences. Based on the results of the on-site tax audit, the tax authority concluded that the Company's expenses in the form of exchange rate differences do not meet the criterion of documentary support and should not be taken into account for profit taxation purposes

• Result

  The Tax Compliance team has prepared an appeal to the superior tax authority (Department of the Federal Tax Service of the subject), in which it: (1) presented evidence of sufficient documentary support of the respective expenses; (2) pointed out the methodological errors committed by the auditors in calculating the additional tax charges. Upon consideration of the appeal, the superior tax authority upheld the Company's position in full.

The client sought advice on the preparation of objections to the protocol of the commission on the legalization of the tax base. Based on the results of the pre-inspection analysis, the tax authority found the subcontractors involved to be controlled, as well as risks indicating that the counterparty did not have the resources to perform the work.

• Purpose

  Elimination of tax risks of understatement of the tax base for VAT and income tax

• Employee involved

  Yulia Pavlova

• Process description

  Tax control measures were carried out in relation to the client, the tax authority indicates the need to clarify the tax liabilities of the client on the subcontractor. According to the tax authority, the contractor involved could not perform work for the client. As part of the legal defense and preparation of a response to the protocol of the commission was able to prove the lack of involvement of the client in the regulation of the disputed counterparty, to confirm the economic feasibility of engaging a controversial counterparty.

• Result

  The implementation of the project allowed to save the client's current assets, exclude the possibility of the appointment of a field tax audit.

• Process description

  At the end of 2016 the Moscow authorities decided to revise the value of a number of key facilities and to make its application retroactive. The Company did not agree to pay corporate property tax for 2016 based on the recalculated value, which led to a dispute with the tax authority. (The project was implemented by an employee before joining Tax Compliance)

• Result

  As a result of developing the right strategy, based on the position of the Supreme Court of the Russian Federation in the case of Yumaks, we were able to convince the court of the legitimacy of the client's claims.

• Process description

  In this project the client was given the task to develop a marketing policy, the inventory of existing marketing activities and development of optimal ways of tax accounting of these activities. The project concerned interaction with bloggers and celebrities, bonus payments, outdoor advertising and advertising in shopping malls, commercial product testing, etc. (The project was implemented by an employee before joining Tax Compliance)

• Result

  Marketing policy was developed for the client, taking into account the recommendations to optimize tax risks. The client also received a detailed description of the tax consequences and accounting methods of the relevant transactions.

A bankruptcy petition has been filed against the Client based on outstanding tax debts

• Purpose

  Representing the company in arbitration court in bankruptcy proceedings at the request of the tax authority

• Employee involved

  Andrey Solomyany

• Process description

  The tax authority filed an application for declaring the Company bankrupt in order to satisfy the claim for tax arrears collection through bankruptcy proceedings. Tax Compliance specialists have developed a defense position justifying the absence of grounds to recognize the application of the tax authority as justified and the need to terminate proceedings in the case

• Result

  The court accepted the arguments of the Company, acknowledged the application of the authorized body unfounded and dismissed the bankruptcy proceedings

• Process description

  Within the framework of this project, a construction company was interested in the tax qualification of an agreement providing for a construction company to demolish social infrastructure facilities with the subsequent construction of new facilities and their transfer to the owner instead of the demolished facilities. In particular, the Client was interested in a wide range of profit tax and VAT issues, including the tax qualification of the transaction as reimbursable (barter) or gratuitous, potential tax risks and other. (The project was implemented by an employee before joining Tax Compliance)

• Result

  As a result of the study, the client received a clear map of tax consequences, a description of tax risks and ways to minimize them.

• Process description

  During the tax period under audit the Company paid remuneration to employees for voluntarily agreeing to terminate an employment contract. This remuneration was included in expenses for corporate income tax purposes. The tax authority considered these expenses to be economically unjustified, which led to a tax dispute. (Project implemented by employee before joining Tax Compliance)

• Result

  The legal position and calculations prepared on the basis of the emerging jurisprudence made it possible to substantiate the illegality of a significant amount of additional charges within the episode. This project was successfully implemented during the most difficult period of time when the practice on accounting of the respective payments as expenses was heterogeneous and contradictory.

• Process description

  The client required advice on a wide range of tax issues, including taxation of IT exit, IT financing using various instruments, distribution of profits, sale of assets, etc. The consulting was carried out at all stages, including the process of IT creation and operation. The work on this project was complicated by the specifics of IT taxation and included analysis of a significant volume of various transactions, including barter transactions, loans, assignment of rights of claim and transfer of debts, as well as other ones. (The project was implemented by an employee before joining Tax Compliance)

• Result

  The client received ready-made solutions on the issues of interest and a map of tax consequences of IT activities. Tax consulting on this project was complicated by the presence of many unresolved issues of IT taxation in Russia, for each of which the client was able to provide effective solutions.

• Process description

  The client requested to analyze the current structure of interaction within the framework of aircraft charter contracts. The consultant was assigned the task to analyze tax risks and identify ways to minimize them. (The project was implemented by the employee before joining Tax Compliance)

• Result

  As a result of the work done by the consultant was able to change the contractual structure, which allowed to minimize the risks of the client associated with the application of 0% VAT rate and others.

• Process description

  The client planned to enter into a license agreement between the U.S. parent company and a Russian subsidiary for an expensive ERP system. A large "security dossier" was prepared for this agreement in order to present it to the tax authorities during an audit. The consultant was given the task of assessing the key tax risks related to the above transaction, as well as to research the weaknesses of the security dossier and formulate recommendations on strengthening the client's position. (The project was implemented by the employee before joining Tax Compliance)

• Result

  The client received an assessment of tax risks and recommendations for their minimization, as well as clear proposals for changing the contractual structure.

• Process description

  The client's counterparty refused to issue an invoice for the work performed on a major construction project. This position of the defendant was due to the fact that the parties had different approaches to determining the final cost of the work. The dispute was also complicated by the existence of conflicting practices regarding the possibility of such claims. (Project implemented by employee prior to joining Tax Compliance)

• Result

  Through an elaborate strategy, the court agreed that the company's invoicing requirements of the counterparty should be satisfied.

• Process description

  A number of buildings of the energy company were used for purposes related to production activities, both directly and indirectly, in particular to accommodate personnel, etc. These buildings were included in the list as a result of a survey of their actual use by the regional authorities, as well as taking into account the permitted use of the land plot. (Project implemented by an employee prior to joining Tax Compliance)

• Result

  In this dispute, we were able to convince the court to exclude all buildings from the list, allowing the client to achieve substantial tax savings.

• Process description

  The client planned to create a legal entity and make investments in the free port of Vladivostok. After the project was implemented, the legal entity to be created was to provide hotel services. The client contacted a consultant to analyze his investment project for compliance with the requirements for SPV residents. (Project implemented by employee before joining Tax Compliance)

• Result

  As a result of the analysis, the client received a clear understanding of the main tax incentives for SPV and related requirements, as well as received clarifications regarding his investment project

• Employees involved

  Mikhail Begunov, Nikita Zharov, Ivan Tsvetkov

• Process description

  The tax authority, as part of its pre-inspection analysis, concluded that the taxpayer used a "split" business scheme. In particular, the tax authority believed that: (1) the inclusion of a retailer who applied the simplified taxation system ("Counterparty") in the chain "producer - end buyer" is due solely to tax motives; (2) the taxpayer and the counterparty are interdependent business entities. In view of the above, the taxpayer was requested to adjust its tax liabilities and submit revised tax returns. The Tax Compliance team helped the client to elaborate a legal position confirming that (1) business transactions with the Counterparty are real; (2) business transactions with the Counterparty have a business purpose; (3) no interdependence exists between the taxpayer and the Counterparty.

• Result

  The tax authority accepted the arguments of the taxpayer.

• Employees involved

  Mikhail Begunov, Ivan Tsvetkov, Nikita Zharov

• Process description

  The Tax Compliance team was given the task of analyzing the tax risks associated with the procedure for taxing the income of individuals working outside of Russia.

• Result

  The Tax Compliance team has identified the areas most exposed to tax risks and prepared recommendations for improving document management (in terms of processing the client's labor relations with employees working outside of Russia) based on the results of the analysis.

We proved the illegality of the initiation of criminal proceedings and obtained the cancellation of the case by the prosecutor's office

• Employees involved

  Mikhail Begunov, Alexander Dmitriev

• Process description

  Investigative authorities have initiated criminal proceedings against managers of an organization on the grounds of committing a crime under part 2 of Art. 199 of the Criminal Code of the Russian Federation. Our lawyers have analyzed the resolution on institution of criminal proceedings and came to the conclusion that it may be cancelled on the following grounds: First reason for cancellation - in the framework of the preliminary investigation the Client's officials, who managed the company during the tax audit, were not interrogated, the role of each of them is not defined, that does not allow to make a conclusion on the presence of the actions of a specific person of the elements of the crime, provided by Art. 199 part 2 of the Criminal Code. 2 OF THE CRIMINAL CODE. The second reason for cancellation - the decision of the tax authority to prosecute for a tax offense suspended by the arbitration court before making a decision on the court case on the Company's application to recognize the decision of the tax authority invalid and, in addition, by the time of institution of criminal proceedings established by Article 32 § 3 of the Tax Code has not expired, and, respectively, the materials of the tax authorities were sent to investigative authorities in violation of the law.

• Result

  Tax Compliance attorneys were able to prove the illegality of the initiation of criminal proceedings, the prosecutor's office considered the complaint and issued a resolution to cancel the investigator's resolution to initiate a criminal case. The initiation of criminal proceedings against the Client under Art. 199 of the Criminal Code was cancelled by the prosecutor's office.

• Employee involved

  Alexey Stanchin

• Process description

  The client had the task of reorganizing the legal structure of the business. Significant problems in implementing the project were: (1) restrictions on corporate matters by the founders; (2) a significant amount of accumulated deductions for inseparable improvements; (3) possible tax risks associated with the foreign element of the business. In view of the above, the taxpayer was offered ways to reorganize the existing legal structure. The Tax Compliance team has prepared a guide on how to implement the said project with the least risk of future tax claims.

• Result

  The client received a guide on how to improve the existing legal structure and with step-by-step actions to implement it

• Employee involved

  Alexey Stanchin

• Process description

  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.

• Result

  The tax authority accepted the arguments of the taxpayer

• Employee involved

  Ivan Tsvetkov

• Process description

  The company purchased goods used in construction at the customer's facilities, paying for the supplies by means of the transfer of promissory notes. As a result of an on-site tax audit, the tax authority concluded that the Company's expenses for purchasing the aforementioned goods were not actually confirmed, on the basis of which it assessed additional VAT and corporate profit tax on all transactions with counterparties. The tax authority also assessed additional personal income tax and insurance contributions on the amount of promissory notes transferred as payment for the above transactions, qualifying these expenses as dividends of a person controlling the Company.

• Result

  As a result of developing a legal position, preparing objections to the act, supporting additional tax control measures, preparing objections to the supplement to the act, as well as representing the Company during the consideration of audit materials by the tax authorities, the tax authorities managed to prove the unreasonableness of additional charges in terms of income tax, personal income tax and insurance premiums, thereby reducing the amount of additional charges by 76%.

• Employee involved

  Mikhail Begunov

• Process description

  The client was interested in a number of services regarding the transition to tax monitoring (hereinafter referred to as TM): - diagnosing readiness to join the TM with the development of recommendations and a roadmap; - finalization and formalization of the internal control system in terms of the tax function and the tax risk management system in order to comply with the requirements of the Federal Tax Service of Russia; - preparation of a package of documents in the formats approved by the Federal Tax Service of Russia for submission upon entry into the tax monitoring regime; - development of requirements for the information system of tax monitoring for the possibility of providing access to it to the tax authority; - development of requirements for electronic archive;

• Result

  Diagnostics of the Company's readiness to join the NM was carried out, a road map was developed. Improved and formalized systems of internal control and tax risk management. A package of documents for entry into the NM has been prepared. The documents, including the regulation on information exchange and regulations on internal control and tax risk management systems, have been agreed upon and successfully adopted by the tax authority. Requirements for the tax monitoring information system and electronic archive were developed, discussions were held with the developers. The documents have been agreed upon and successfully accepted by the developers.

Client support within the framework of obtaining the status of an accredited IT company

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Tax Compliance team had the following tasks: (1) to analyze the possibility of obtaining the status of an accredited IT company by the organization; (2) accompany the client in obtaining the status of an accredited IT company.

• Result

  Based on the results of the analysis, the Tax Compliance team suggested that the client finalize the organization’s website in order to ensure its compliance with the requirements established by Decree of the Government of the Russian Federation of September 30, 2022 N 1729. After making adjustments, the Tax Compliance team: (1) helped the client collect a package of documents required to apply for obtaining the status of an accredited IT company; (2) assisted the client in drafting a statement confirming the share of the company's income from IT activities. Based on the results of consideration of the client's application, it was decided to include it in the list of organizations accredited in the field of IT.

• 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

Development of a description of a comprehensive internal control system and requirements for automation of control procedures when implementing a unified information system for accounting and tax accounting of the largest industrial holding

• Purpose

  Development of a description of a comprehensive internal control system and requirements for automation of control procedures

• Employee involved

  Mikhail Begunov

• Process description

  The client was interested in providing the following services: - development of a detailed description of the risks of the financial function (including accounting, formation of regulated reporting, planning and budgeting, treasury); - development of a description of control procedures covering the specified risks; - formation of a risk matrix and control procedures with analysts necessary for the Company; - development and implementation of documents regulating the definition of the boundaries of the internal control system of the financial function, updating its description, testing the effectiveness of the design and operational effectiveness of control procedures, conducting a procedure for assessing the effectiveness of the internal control system by the Company's management;

• Result

  An analysis of the business processes of the financial function was carried out, risks and controls were described, and a matrix of risks and controls was formed. Documents regulating the functioning of the internal control service, as well as a package of applied documents, have been formed. Requirements for the automation of control procedures and recommendations for further improvement of the internal control system have been developed.The company highly appreciated the results of the project and the effect of the introduction of a comprehensive internal control system - the results of the project helped to increase the management's confidence in the correctness of accounting and reporting data, the timeliness of payments, the completeness and correctness of budgets, reduce the risk of errors and inaccuracies, and increase the responsibility of employees.

Development of requirements for the functionality of an analytical data mart for the purposes of tax monitoring

• Purpose

  Develop requirements for the functionality of an analytical data mart for the purposes of tax monitoring

• Employee involved

  Mikhail Begunov

• Process description

  The client was interested in providing the following services: - development of business requirements and functional requirements for the analytical data mart; - support of communication with an IT integrator during the implementation of a data mart.

• Result

  The analysis of business processes and IT systems of the Company, mechanisms of their interaction was carried out. Business requirements for the functionality of the data mart were formed based on the requirements of the Federal Tax Service of Russia, the requirements and wishes of the Company, and the best practices for implementing data marts. There was a discussion of business requirements with an IT integrator, as well as a discussion of the capabilities and logic of the integrator's IT solution. The functional requirements for the system were formed and agreed with the integrator, support was provided for the development and testing of the data mart.

• Employee involved

  Alexey Stanchin

• Process description

  A taxpayer approached the Tax Compliance team regarding tax risk minimisation.
  
  Our work on the project included advising the client on:
  
  (1) separate VAT accounting
  (2) VAT treatment of the DDE and the POA
  (3) availability of receivables
  (4) issues related to field tax audit
  (5) Interactions with tax authorities during a PIT
  (6) justification of accounting policy principles used by a taxpayer to a tax authority.
  
  In view of the above, the Tax Compliance team offered the taxpayer an action plan to support the field tax audit and helped develop a legal position confirming:
  
  (1) the validity of applying separate accounting for the use of transactions under the DDE and the ACP
  (2) no additional accruals of non-operating income are required.
  
  In addition, we managed to eliminate the client's risks in terms of separate VAT accounting and identify other risks in taxation.

• Result

  As a result of the project, the claimed claims of the tax authority were reduced by 99%.

• 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.

• Employees involved

  Mikhail Begunov, Nikita Zharov, Andrey Solomyany

• Process description

  In the course of an on-site tax audit, the tax authority questioned the reality of the Company's relationships with a number of disputed counterparties. As a consequence, the tax authority reconstructed the Company's tax liabilities, which were based on information about real business transactions. At the same time, the tax authority denied the Company the right to a VAT deduction for relations with real counterparties. In the opinion of the tax authority, the Company was not entitled to a separate VAT deduction (as part of the reconstruction) due to the expiration of the three-year period established by Art. 172 of the Tax Code, as a prerequisite for applying deductions.

• Result

  Tax Compliance team helped the client to prepare a legal position and represented the company in court proceedings. The court of the first instance fully satisfied the claims of the Company, admitting unlawful additional charges of VAT (including the appropriate amount of penalties). The decision of the court may have a significant impact on the development of practice of application of Article 54.1 of the Tax Code, in particular on the issue of the procedure of determining the actual size of the tax liabilities and the inapplicability of the condition of the deadline for claiming deductions in case of tax reconstruction.

• 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.).

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).

The tax provision for corporate property tax was identified and the process of reducing the cadastral value of the property was passed

• Employee involved

  Nikita Zharov

• Process description

  The client was interested in finding tax reserves for corporate property tax. The team identified an opportunity to reduce the cadastral value of the property, helped collect the necessary evidentiary basis and accompanied the legal process of contestation.

• Result

  As a result of the lawsuit, the cadastral value of the property was reduced by more than 25 percent. The tax savings for the client amounted to more than 50 million rubles.

The client was rendered services to draw up an objection to the act of a tax audit, additional materials of tax control, the basis for the collection of taxes was the assumption of the tax authority that the organization has not carried out construction work on the site.

• Purpose

  Confirm the actual performance of works by subcontractors for the construction of the Moscow-St. Petersburg Expressway, confirming the absence of a scheme to obtain an unjustified tax benefit

• Employee involved

  Alexey Stanchin

• Process description

  An on-site audit was carried out in respect of the client, as a result of which additional VAT was charged on the counterparty. According to the tax authority, in fact the specified work was not performed by the disputed counterparty, but was performed by the taxpayer itself or other organizations. In the legal defense developed a legal position, which proved that the performers were part of the same group of companies, consisting of more than 12 legal entities. The taxpayer, when working with the counterparty considered it as a single economic entity and could not know about the corporate structure of the counterparty.

• Result

  According to the results of the developed legal position it was possible to confirm the economic feasibility of the transaction, as well as the reality of the financial and economic activities of the disputed counterparties.

This is the first example of a tax dispute in favor of the taxpayer to confirm the reality of transactions with counterparties in the framework of traffic services.

• Process description

  The client appealed to the arbitration court with a claim to the tax authority to invalidate the decision made on the basis of the field tax audit. The basis for the accrual of additional taxes, penalties and fines served as the basis for the conclusions of the tax authority that the Client received an unjustified tax benefit in the relationship with several counterparties, which, as telecommunications operators, could not provide services for traffic transit in connection with the fact that they had signs of organizations that do not perform real financial and economic activities. The main difficulty in proving the case is that the "traffic service" has no clear material expression and is not subject to visualization, therefore it was very difficult to collect the evidence base confirming the reality of transmitting traffic. During the court hearing Tax Compliance lawyers managed to have technical expertise assigned to the case and attach the expert's conclusion to it. As the result of legal efforts and well-designed defense strategy the court of the first instance partially ruled in favor of the Client. In this case the court saw an opportunity to interpret the concept of "due diligence" in favor of telecom companies. It pointed out that, given the specifics of the traffic services provided, as well as the peculiarities of the communications equipment through which the services are provided, the process of checking the availability of the counterparties' communications equipment, as well as the setting up of the connection was carried out remotely. This approach (if supported by higher courts) may be used by other recipients of similar services (in particular, telecommunications companies), both at the stage of selecting counterparties and when defending against claims of tax authorities.

• Result

  Tax Compliance team managed to defend about 50% of the additional tax charge (in the part of corporate income tax the Client's claims were recognized as legitimate). This dispute is unique and forms positive arbitration practice for the entire telecommunications industry.

Settled a dispute with the tax authority regarding the economic feasibility of expenses in the form of agency fees

• Employee involved

  Nikita Zharov

• Process description

  The Company purchased agency services aimed at attracting new clients. The tax authority concluded in its pre-inspection analysis that the Company's expenses for the acquisition of the above services were economically unjustified and should not be taken into account for profit taxation purposes.

• Result

  The team prepared a legal position substantiating the economic necessity of engaging agents and represented the client in meetings with the tax authority. As a result of the pre-inspection analysis, the tax authority accepted a significant part of the Company's arguments.

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%.

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

• Employees involved

  Mikhail Begunov, Nikita Zharov

• Process description

  The Tax Compliance team had the task of analyzing the personal income tax risks that may arise for a shareholder of a large catering chain due to participation in a CFC. Since the establishment of the foreign organization, the client has not submitted a CFC notification to the tax authority. At the time of the opinion, the statute of limitations under the relevant article of the Tax Code had not expired. The client was interested in the analysis and cost estimate of tax risks for failure to submit CFC information.

• Result

  As a result of the analysis, Tax Compliance specialists prepared an opinion describing the tax risks and estimated their costs.

Accompanying the transition of a major trading company to tax monitoring

• Purpose

  Connection to the tax monitoring system and reducing the risk of additional additional tax assessments.

• Employee involved

  Yulia Pavlova

• Process description

  Within support of the procedure of transfer to tax monitoring the client was rendered services on preparation of documents according to the requirements of the Federal Tax Service Russian FTS. In particular, it was actualized and brought in compliance with the effective tax legislation, the accounting policy for tax accounting purposes, documents regulating the company's internal control system were prepared of the company, and prepared tables and data on coordinators of of subdivisions and levels of control within the company.

• Result

  Successful work on the analysis and preparation of documents required for the transition to tax monitoring, as well as interaction with the tax authority to address procedural issues in connecting to the tax monitoring system, allowed the client to take advantage of the transition to this mode of tax control and reduce the risk of additional additional tax assessments.

Challenging of the tax authority decision on violation of the terms of loan repayment, issued by the taxpayer to a foreign company.

• Duration

  June 2019 - March 2020

• Employees involved

  Mikhail Begunov, Andrey Solomyany

• Process description

  In the opinion of the tax authority, the organization violated the term for receiving (returning) the deposit by a resident of foreign currency in accordance with the terms of the loan agreement issued by the taxpayer to the foreign company

• Result

  As a result, all claims of the tax authority with regard to violation of terms for receiving foreign currency by a resident in accordance with the terms of the loan agreement were successfully challenged in courts of 3 instances, as the tax authority did not take into account the submitted additional agreements to the loan agreement with the foreign company.

During the on-site tax audit, the Inspectorate found that the Company had concluded contracts for construction work and the supply of building materials with "technical" organizations that were financially and administratively controlled by the Company.

• Employees involved

  Mikhail Begunov, Yulia Pavlova

• Process description

  The task was complicated by the fact that - the volume of money transfers from the Company to "technical" organizations was 70% and higher; - Access to bank accounts and the electronic document management system with the fiscal authorities was carried out from the same device at the same time interval; - overlap of key employees; - coordination of business activities of "technical" organizations was performed by the Company; - the Company had direct relations with the actual suppliers and contractors before the inclusion of "technical" organizations in the chain of suppliers and contractors; - part of funds sent by the Company to the accounts of "technical" organizations was subsequently transferred by them to the accounts of actual suppliers and contractors.

• Result

  Our lawyers have achieved the application of tax reconstruction according to the letter № БВ-4-7/3060@ of 10.03.2021 issued by the Federal Tax Service of Russia, thanks to which the Inspectorate has taken into account the real amount of expenses, attributable to the services of actual contractors and suppliers. Also, to confirm the reality of the expenses we have prepared and submitted a package of documents. Actions of Tax Compliance lawyers helped to reduce the amount of tax claims by half and formed the practice of tax reconstruction.

Claims tax authority was made in connection with the unjustified inclusion in the composition of VAT deductions and profit tax costs incurred in the relationship with the disputed supplier, as well as the improper application of VAT deductions for recycled goods.

• Purpose

  As a result, claims of the tax authorities were successfully challenged in the arbitration court after the second round of judicial appeal since the Tax Compliance lawyers managed to prove the reality of transportation of fruits from the importer to the disputed supplier. They also provided a technological description of the utilization of the goods and the validity of the VAT deduction for the disputed transaction. Translated with www.DeepL.com/Translator (free version)

• Employee involved

  Andrey Solomyany

• Process description

  The tax authority charged the grocery retailer additional VAT and income tax on the fruit supplier, citing the impossibility of tracing the goods from the importer to the final supplier for this delivery, as well as the presence of formal claims against the supplier. Also in connection with the fact that the fruit supplied was of improper quality and disposed of by the client within the same tax period, the tax authority further argued the impossibility of applying VAT deductions due to the lack of the object of taxation.

• Result

  As a result, claims of the tax authorities were successfully challenged in the arbitration court after the second round of judicial appeal since the Tax Compliance lawyers managed to prove the reality of transportation of fruits from the importer to the disputed supplier. They also provided a technological description of the utilization of the goods and the validity of the VAT deduction for the disputed transaction.

We disputed the claim of the tax authority to suppliers of raw materials for medicines.

• Purpose

  Claims of the tax authority for income tax were partially withdrawn. The taxpayer's objections were partially satisfied in the amount of 343 million ₽. Positive practice of pre-trial appeal against acts of tax authorities in relation to manufacturers of medicines was formed taking into consideration the specifics of the industry.

• Employee involved

  Mikhail Begunov

• Process description

  At the stage of objections and additional activities it was proved that it is necessary to measure quantitative indicators at the beginning and at the end of the production process. The tax authority has been provided with calculations on writing-off materials purchased from contested counterparties and information on raw material remainders.

• Result

  Claims of the tax authority for income tax were partially withdrawn. The taxpayer's objections were partially satisfied in the amount of 343 million ₽. Positive practice of pre-trial appeal against acts of tax authorities in relation to manufacturers of medicines was formed taking into consideration the specifics of the industry.