• 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.

• 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%.

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.

• Employee involved

  Ivan Tsvetkov

• Process description

  The Company purchased raw materials used in the production of textile products which were subsequently sold to the Company's customers. As a result of an on-site tax audit, the tax authority concluded that the Company's purpose in concluding transactions with the disputed counterparties for the supply of raw materials was not to obtain the results of entrepreneurial activity, but to obtain tax savings, on the basis of which it imposed additional VAT and profit tax on all transactions with the said counterparties. In the opinion of the tax authority, transactions with the disputed counterparties were performed not by the said counterparties but by other persons who were not parties to contracts concluded with the Company.

• Result

  Successful defence of the interests of a textile manufacturer in an arbitration court on the application of tax reconstruction

• 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.

• Employee involved

  Ivan Tsvetkov

• Process description

  During the audited period, the joint-stock company carried out water supply and water disposal of facilities, including residential buildings, industrial facilities and social infrastructure facilities. As a result of the field tax audit, the tax authority concluded that the Company had received an unjustified tax benefit in the following episodes: (1) provision of motor transportation services by a person who is not a party to the contract; (2) unjustified inclusion of amounts of written-off accounts receivable in non-operating expenses; (3) Illegal non-recovery of VAT, non-deduction of VAT and overstatement of expenses on transactions, VAT and expenses on which were reimbursed by subsidies as gratuitous contributions to property that did not increase the Company's authorized capital; (4) Illegal non-inclusion in non-operating income of a part of the subsidy equal to capital investments in depreciable real estate and written off by the Company through the depreciation mechanism. The Company, while not disputing the amounts of additional charges imposed by the tax authority in the episode involving the unjustified inclusion in non-operating expenses of amounts of written-off accounts receivable, disagreed with the tax claims in the other episodes.

• Result

  Following a study of the legal position, which was developed by Tax Compliance specialists based on the results of the analysis of the actual circumstances of the dispute, the tax authority made a decision to satisfy in full the Company's claims in respect of profit tax. In addition, the tax authority satisfied the Company's claims (1) on the necessity to carry forward the unused amount of losses of previous years to reduce the taxable base for profit tax, (2) on the necessity to reduce the amount of the penalty due to the presence of mitigating circumstances (the amount of the penalty was reduced by 99%), as well as (3) on the calculation of penalties taking into account the moratorium on their accrual. Thus, the tax authority satisfied the Company's claims with respect to profit tax, the need to carry forward the unused amount of losses from previous years, and the need to reduce the fine and penalties in full, which significantly reduced the amount of additional charges - over RUB 10 million (approximately 66% of additional charges).