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

Retail Successfully
Tax-support

Analysis of tax risks associated with transactions with shares in the authorised capitals of the Companies.

  • Employees involved

    Mikhail Begunov, Nikita Zharov

  • Process description

    The client applied for the purpose of identifying and assessing tax risks that may arise in the course of realisation of transactions with shares in the charter capitals of the Companies.

  • Result

    The Tax Compliance team conducted due diligence in connection with planning transactions with shares in the authorised capital of the Companies. The key feature of the project was the assessment of the impact on tax consequences of the presence of a substantial amount of retained earnings on the balance sheet of the Companies, which were planned to be distributed immediately after the acquisition of shares by the Client. As a result of the project, the Tax Compliance team assessed for the Client the tax risks that may arise in connection with the transactions. In particular, in the course of the project implementation Tax Compliance specialists: (1) conducted comprehensive due diligence of transactions; (2) assessed the possibility of reclassification of transactions by the tax authority; (3) structured the planned transactions taking into account the tax consequences of their execution.

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 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.

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 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.

Retail 1 billion ₽
Tax-support

Analysis of risks in the realization of Russian business by "unfriendly" residents

  • 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.

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.

IT Successfully
GR support

Development of a resolution to the Ministry of Justice of the Russian Federation

  • Employees involved

    Mikhail Begunov, Nikita Zharov, Andrey Solomyany

  • Process description

    The client approached Tax Compliance to provide support in the development and promotion of a legislative initiative to extend IT business tax incentives to a new segment of IT companies.

  • Result

    The Tax Compliance team helped the client develop a draft law aimed at extending tax incentives for IT businesses to a new segment of IT companies. As a result of the project, the Tax Compliance team prepared a resolution to the Ministry of Justice of the Russian Federation to promote the above legislative initiative. The legislative initiative is under consideration.

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 ₽.

Retail Successfully
Tax-support

Analysis of tax risks associated with the application of a reduced VAT rate on the sale of certain goods

  • 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.

Retail Successfully
Tax-support

Analysis of tax risks for VAT and profit tax associated with the sale of products by the Client in case of its payment by purchasers with bonuses in full, as well as the order of registration of cash vouchers in this case

  • 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.

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.

Retail Successfully
Advice on taxation of CFCs

Analysis of tax risks associated with CFC notification filing

  • 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.

IT 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

IT Successfully
Tax-support

Analysis of tax risks associated with the withdrawal of the IT function

  • Employees involved

    Mikhail Begunov, Nikita Zharov

  • Process description

    The Client was considering the possibility of separating the IT function from the management company structure within the Group into a separate legal entity. In this regard, the Client was interested in analysing (1) the corporate structure of the Group for risks of claims related to the "split" of the business; (2) the business contracts of the newly established IT Company for compliance with the requirements of tax legislation in terms of the application of tax benefits for IT companies.

  • Result

    In the course of the project implementation Tax Compliance specialists: (1) conducted a comprehensive analysis of interaction between the Group and IT-companies and prepared proposals for adjusting the corporate structure in order to reduce risks in terms of "splitting" the business; (2) developed proposals for adjusting the provisions of the agreement in order to ensure its compliance with the requirements of tax legislation in terms of applying tax benefits for IT-companies.

Production Successfully
Consulting in the UAE

Supporting the procedure of dismissal of an employee of a mainland - company in the UAE

  • Employees involved

    Mikhail Begunov, Nikita Zharov

  • Process description

    The client (mainland - a company in the UAE) was interested in legal support of the procedure of dismissal of an employee. The process was complicated by the fact that it had to be completed within a short period of time before the employee left the UAE.

  • Result

    The TC team assisted the client in the framework of dismissal of an employee, in particular: (1) drafting the necessary documents; (2) supporting communication with the UAE governmental authorities.

IT 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.

Construction 300 m ₽
Tax-support

Analysis of tax risks related to the offsetting of counterclaims

  • 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.).

IT 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.

Construction Successfully
Support of individual tax control measures

Support of an international EPC-company within the framework of pre-trial tax control activities

  • 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.

IT 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.

Construction Successfully
Support of disputes with tax authorities

Defending a construction company during a tax audit

  • Employees involved

    Mikhail Begunov, Nikita Zharov, Alexander Dmitriev

  • 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%.

Production Successfully
Consulting in the UAE

Opening a corporate bank account in the UAE

  • Employees involved

    Mikhail Begunov, Nikita Zharov

  • Process description

    A client registered a company in an IFZA freezone in the UAE. He needed to open a corporate account with a bank in the UAE for settlements with counterparties.

  • Result

    The TC team helped the client to open corporate accounts (in AED / USD) in a bank in the UAE. As part of the project, our specialists assisted with the preparation of the necessary documents and communication with the bank's representatives.

IT Successfully
Tax support for IT-business

  • 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.

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.

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.

transport Successfully
Tax support of transactions

Supporting intragroup debt restructuring in the context of sanctions restrictions

  • 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.

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