Industries

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

Nikita Zharov

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.

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

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

Andrey Solomyany

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

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 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.

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.

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

Mikhail Begunov, Nikita Zharov

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.

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.

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.

Nikita Zharov

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.

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.

Nikita Zharov

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.

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.

June 2019 - December 2019

Mikhail Begunov

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.

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.