Nikita Zharov
Nikita Zharov Nikita Zharov

Nikita Zharov

Senior Consultant in Tax Practice
Industries

Transport and Logistics, IT business, Real Estate and Construction, Pharmaceuticals, Energy, Manufacturing

V CARD V CARD
Biography

Nikita graduated with a BA and MA from Lomonosov Moscow State University with a law degree, as well as a professional retraining program in accounting for commercial organizations at the Higher School of Economics. Completed a refresher course in international taxation at Tedo Academy (ex - PwC)

Before joining Tax Compliance, Nikita worked for BIG-4 companies. He has more than 5 years of professional experience in the legal field of taxation.

Nikita specializes in analysis and management of tax risks, support of companies in pre-inspection analysis and tax audits, representation of clients in pre-trial and judicial settlement of disputes with tax authorities.

Most of the projects implemented with the participation of Nikita:

- analysis of tax risks associated with the client's participation in the intra-group financing system (cash pooling)

- assisting the client in the pre-inspection analysis on the issue of the legality of expense accounting / application of VAT deductions on transactions with the "technical" companies

- assisting the client in the tax audit and pre-trial settlement of the dispute with the tax authority on the issue of application of reduced withholding tax rate on dividends paid to the foreign shareholder (Republic of Cyprus)

- assisting the client in a tax audit on the issue of the correctness of expense accounting/application of VAT deductions on transactions with technical companies

- assisting the client in the pre-trial settlement of a dispute with the tax authorities on the issue of writing off commodity losses

- support of the client in pre-trial/judicial settlement of the dispute with the tax authority on the issue of legitimacy of accounting for royalty payments

Cases

Construction Successfully
Pre-court settlement of tax disputes

Support of the client in appealing to the Central Office of the Federal Tax Service of Russia against the decision of the tax authority on the issue of bringing to responsibility for willful non-payment of taxes

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.

Production Successfully
Redomicilation in the SAR

Analysis of the possibility of redomiciliation of a business entity in the ATS

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.

It-biznes Successfully
Support within the framework of obtaining the status of an accredited IT company

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

Construction Successfully
Support in the framework of pre-test analysis

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.

Production Successfully
Pre-court settlement of tax disputes

Support of the client in the framework of the appeal of the client on the issue of the legality of accounting exchange rate differences

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.

Construction Successfully
Health-check

Express - analysis of client's business activities for the presence of tax risks

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.

Construction More than 50 millions ₽
Tax reserves

Supporting the client (owner of one of the largest shopping malls in Moscow) in challenging the cadastral value of the property

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.

It-biznes Successfully
Advising on the application of tax legislation

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

transport Successfully
Advising on the application of tax legislation

Advising the client on personal income taxation of individuals working outside the Russian Federation

  • 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.

It-biznes More than 500 million rubles. ₽
Tax support for IT-business

Supporting the client in the pre-inspection analysis

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.

Pharmaceuticals Successfully
Advising on the application of tax legislation

Analysis of tax risks associated with the possible qualification of the nature of the Group's business (federal pharmacy chain) as a "split" business scheme

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.

It-biznes Successfully
Support within the framework of obtaining the status of an accredited IT company

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.

energy Successfully
Support of tax audits

Support of the client in the field tax audit and pre-trial appeal on the validity of the application of the reduced tax rate at source

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

It-biznes Successfully
Tax support for IT-business

Supporting the client in the process of separating the IT function within the Group into a separate organizational structure

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.

It-biznes Successfully
Tax support for IT-business

Checking the possibility of applying the tax incentives provided for in the IT maneuver

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.

Pharmaceuticals Successfully
Support in the framework of pre-test analysis

Supporting the client (international pharmaceutical manufacturer) in the pre-testing analysis on the interaction with the "technical" organization

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.

Construction 580 million ₽
Court settlement of tax disputes

Successful appeal of additional VAT charges in a tax reconstruction case

  • 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.

Production Successfully
Support in the framework of pre-test analysis

Assisting the client in preparing a legal position on the "splitting" of the business

  • 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.

Construction 7.5 mln ₽
Pre-court settlement of tax disputes

Support of the client in appeal against the decision of the tax authority on the issue of bringing to responsibility for willful non-payment of taxes

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 ₽.

Construction Successfully
Analysis of the system for interaction with counterparties

Analysis of the effectiveness of the taxpayer's internal control system for selecting and interacting with counterparties

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.

Publications