Tax risks: how they affect reputation and how to assess them

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Author of the article:

Sultanov Iskander Anvarovich

Founder of Projectimo.ru

Recent publications by the author:

Systematic labor standardization project

Implementation of a project to transfer accounting to outsourcing

Anticipation of significant changes in investments

Twenty-five years ago the countdown began for the formation and development of the new tax system in Russia. In 1991, the newly created tax inspectorate was perceived by former cooperators, who overnight became businessmen, not as a source of numerous threats, but as an almost optional dictate of the times. The state's orders to pay taxes, which were insignificant at that time, were perceived quite naturally. Sobering up happened quite quickly, tax risks became part of the main threats to business activity, and since then they have been evolving, continuously improving.

Tax risks. Due diligence disputes

11.10.19
The article was published in the newspaper “First Page” No. 9 (114), October 2020.

The legislation does not clearly define tax risks. However, back in 2007, the Federal Tax Service, by Order dated May 30, 2007 No. MM-3-06/ [email protected] “On approval of the Concept of the planning system for on-site tax audits” (hereinafter referred to as the Concept), approved publicly available criteria for self-assessment of risks for taxpayers, used by tax authorities in the process of selecting objects for conducting on-site tax audits.

According to the Concept, planning on-site tax audits is an open process based on the selection of taxpayers to conduct on-site tax audits based on the risk criteria of committing a tax offense.

Previously, planning on-site tax audits was a purely internal confidential procedure of the tax authorities.

In order to ensure a systematic approach to the selection of objects for conducting on-site tax audits, the Concept defines an algorithm for such selection.

The selection is based on a qualitative and comprehensive analysis of all information available to the tax authorities (including from external sources), and on its basis the determination of “risk zones” for committing tax offenses.

Thus, in this Concept, planning on-site tax audits is interconnected with the formation and development among taxpayers of a correct understanding of the legislation on taxes and fees, the conviction that its violation is inadmissible and the need for strict compliance with the laws.

At the same time, the taxpayer can use his right to independently assess risks and evaluate the advantage of independently identifying and correcting errors made when calculating taxes.

According to the Concept, every taxpayer must understand that the possibility of not including an organization in the plan of on-site tax audits depends on the transparency of its activities, the completeness of calculation and payment of taxes to the budget.

Thus, in accordance with this Concept, planning of on-site tax audits is carried out on the basis of the principle of bilateral responsibility of taxpayers and tax authorities, in compliance with which the former strive to fulfill their tax obligations, and the latter - to a reasonable selection of taxpayers for conducting on-site tax audits.

Systematic self-assessment of risks based on the results of its financial and economic activities will allow the taxpayer to timely assess tax risks and clarify their tax obligations.

This Concept contains 12 main criteria for assessing tax risks:

the tax burden of a given taxpayer is below its average level for business entities in a specific industry (type of economic activity);
reflection of losses in accounting or tax reporting over several tax periods;
reflection in tax reporting of significant amounts of tax deductions for a certain period;
the outstripping growth rate of expenses over the growth rate of income from the sale of goods (works, services);
payment of average monthly wages per employee below the average level for the type of economic activity in the constituent entity of the Russian Federation;
repeated approach to the maximum value of indicators established by the Tax Code of the Russian Federation that grant taxpayers the right to apply special tax regimes;
reflection by an individual entrepreneur of the amount of expenses as close as possible to the amount of his income received for the calendar year;
building financial and economic activities on the basis of concluding agreements with counterparties, resellers or intermediaries (“chains of counterparties”) without reasonable economic or other reasons (business purpose);
failure by the taxpayer to provide explanations for notifying the tax authority about the identification of discrepancies in performance indicators, and (or) failure to provide the tax authority with the requested documents, and (or) the availability of information about their destruction, damage, etc.;
repeated deregistration and registration with the tax authorities of the taxpayer in connection with a change in location (“migration” between tax authorities);
a significant deviation of the level of profitability according to accounting data from the level of profitability for a given field of activity according to statistics;
Conducting financial and economic activities with high tax risk.

All of the above criteria differ by type of activity, industry, and region of location of the taxpayer. For example, the criterion for the significance of the amounts of tax deductions differs depending on the region, but is within 89%. The profitability criterion depends on the industry and type of activity, etc.

Address in the invoice in accordance with the Unified State Register of Legal Entities (USRIP)

On October 1, 2020, changes to the Government of the Russian Federation of December 26, 2011 No. 1137 came into force (introduced by the Government of the Russian Federation of August 19, 2017 No. 981). In particular, in lines 2a and 6a of the invoice it is now necessary to indicate the address in accordance with the Unified State Register of Legal Entities or the Unified State Register of Individual Entrepreneurs (paragraphs “d” and “j”, paragraph 1 of Section II of the Rules for filling out an invoice). These amendments raise the following questions. What consequences can an incorrect address (seller or buyer) have for the buyer? And also, wouldn’t it be a mistake to reflect the full address of the individual entrepreneur’s counterparty in the invoice, since in the Unified State Register of Individual Entrepreneurs the individual entrepreneur’s address is indicated only to the locality (does not include a street, house, apartment)?

— Errors in invoices that do not interfere with the identification of the seller, buyer, name of goods (work, services), property rights, their value during a tax audit, as well as the tax rate and amount of tax charged to the buyer, are easily corrected. And the information in which these errors were made does not relate to the circumstances with which the Tax Code of the Russian Federation associates the onset of tax consequences.

In any case, errors in indicating the addresses of the supplier and buyer of the transaction do not prevent the identification and verification of counterparties, and also do not constitute grounds for refusal to accept VAT amounts for deduction. Indicating the most complete details of the taxpayer, for example the address of an individual entrepreneur, is also not an error that leads to tax consequences, clarifies Evgenia Yuryevna Astashova.

Legal aspect of tax risks

In its Letter dated 06/03/2016 No. ED-4-15/ [email protected] “On the assessment of RMS risk indicators”, the Federal Tax Service of Russia for the first time disclosed information that taxpayers in the risk management system of the automated VAT-2 control system (ASK VAT-2 RMS) 2) are divided by risk level automatically - based on the results of the risk management system. The tax inspector only needs system indicators to assess the potential risks of auditing a taxpayer.

In practice, things are not so simple. An on-site inspection is assigned not only on the basis of these criteria, but they enable the analytical department of the Federal Tax Service to begin to develop the connections and activities of those taxpayers who have not passed “through the sieve” of the ASK VAT RMS (now ASK VAT-3).

In recent years, the tax authority has methodically issued letters of explanation to taxpayers to independently assess their activities from the point of view of tax risks. These clarification letters contain criteria for business fragmentation, criteria for unjustified tax benefits, and judicial practice in tax disputes, and the tax authority is so confident in its abilities that it publishes both losing and winning decisions of judges for taxpayers.

Based on the above, the following conclusions can be drawn:

tax risks are the likelihood of committing tax offenses leading to negative economic and legal consequences (collection of arrears, penalties, fines, tax, administrative and criminal liability, subsidiary liability of persons controlling the debtor (KDL), etc.) for the taxpayer or tax agent;
Taxpayers can assess tax risks on their own, since most of the criteria are public;
if the tax authority has appointed an on-site tax audit, it means that the tax risk of this taxpayer is not just high, but the fact of committing a tax crime is obvious to the tax authority, i.e. the tax risk has been realized.

One of the main criteria that entails significant tax risks is still criterion No. 8: the construction of financial and economic activities based on the conclusion of agreements with counterparties-resellers or intermediaries (“chains of counterparties”) without the presence of reasonable economic or other reasons (business goals).

This criterion, after the Plenum of the Supreme Arbitration Court No. 53 of October 12, 2006, “On the assessment by arbitration courts of the validity of a taxpayer receiving a tax benefit,” became decisive in various tax disputes and, despite the introduction of Art. 54.1 remains in demand at the current time.

Courts and tax authorities carefully apply (or rather, carefully do not apply) Art. 54.1 Tax Code of the Russian Federation. This is because if you start using it, then most taxpayers will have no chance of running a business, since it will be difficult to prove that the taxpayer incurred expenses not for the purpose of reducing the tax base for income tax or to obtain deductions for personal income tax or VAT.

Proving the existence of reasonable economic and other reasons (a business purpose) is based on the old approach of due diligence and economic justification.

In Art. 252 of the Tax Code of the Russian Federation introduces the concept of “economic feasibility,” which a group of deputies of the State Duma of the Russian Federation tried to challenge and reduce to the term “economic feasibility.” The Constitutional Court in its rulings No. 320-O-P and No. 366-O-P dated 06/04/2007 indicated: “Tax legislation does not use the concept of economic feasibility and does not regulate the procedure and conditions for conducting financial and economic activities, and therefore the validity of expenses that reduce For tax purposes, income received cannot be assessed from the point of view of its expediency, rationality, efficiency or the result obtained. By virtue of the principle of freedom of economic activity (Article 8, Part 1, of the Constitution of the Russian Federation), the taxpayer carries out it independently at his own risk and has the right to independently and individually assess its effectiveness and expediency.

Within the meaning of the legal position of the Constitutional Court of the Russian Federation, expressed in Resolution No. 3-P dated February 24, 2004, judicial control is not intended to check the economic feasibility of decisions made by business entities that have independence and wide discretion in the business sphere, since due to their risky nature Such activities have objective limits on the courts’ ability to detect the presence of business miscalculations in them.

Consequently, the norms contained in the second and third paragraphs of paragraph 1 of Art. 252 of the Tax Code of the Russian Federation do not allow their arbitrary application, since they require the establishment of an objective connection between the expenses incurred by the taxpayer and the focus of his activities on making a profit, and the burden of proving the unfoundedness of the taxpayer’s expenses rests with the tax authorities.”

The Ministry of Finance of the Russian Federation and the Federal Tax Service have repeatedly confirmed this approach in their letters. In one of the latest appeals (Letter of the Ministry of Finance of the Russian Federation dated April 19, 2019 No. 03-0307/28232), officials indicated: “At the same time, we note that the validity of expenses taken into account when calculating the tax base should be assessed taking into account the circumstances indicating the taxpayer’s intentions to receive economic benefits.” effect as a result of real business or other economic activity.

Considering that tax legislation does not use the concept of economic feasibility and does not regulate the procedure and conditions for conducting financial and economic activities, the validity of expenses that reduce income received for tax purposes cannot be assessed from the point of view of their feasibility, rationality, efficiency or the result obtained. By virtue of the principle of freedom of economic activity (Part 1 of Article 8 of the Constitution of the Russian Federation), the taxpayer carries out it independently at his own risk and has the right to independently and individually assess its effectiveness and expediency.”

Top 5 tax risks in construction

Home / Construction and real estate

29.05.2016

The most common claims from fiscal authorities against construction companies

About how not to fall under the disgrace of the tax inspectorate and prove that you are not using shell companies, how to correctly and legally “split” a construction business, as well as new ways of the state to combat salaries in envelopes - in a new blog for BUSINESS Online » from ANP Zenit partners Yulia Zazdravnaya and Guzel Valeeva. After reading the material, you will also find out whether developers, who have become one of the biggest victims of the crisis, can avoid additional property taxes if they are not put into operation.

It's no secret that the construction industry accounts for the largest number of claims in relations with unscrupulous contractors.

Builders occupy a significant share of the tax component of the Russian budget. At the same time, from the point of view of tax administration, this industry is recognized as the most risky. Let's look at the most common claims from tax authorities against construction companies.

1. Ephemerals

The fight against fly-by-night companies is traditionally announced as GOAL No. 1 of the tax service.

To identify such companies and combat gray schemes, a software complex with the complex name “ASK VAT-2”, which stands for “software complex for automated control over value added tax, second version,” has been working for the second year.

Tax authorities have already boasted of the results more than once: with the introduction of the ASK-VAT-2 system, revenues from value added tax increased by 12%, while the number of fly-by-night companies decreased by more than 2 times - from 1.7 million in 2011 up to 650 thousand in January 2016, the head of the department Mikhail Mishustin .

How it works? The program compares the VAT charged by the seller (according to his sales book) and the VAT accepted for deduction by the buyer (according to his purchase book). If these data do not match, the program finds out what is wrong: whether the seller reflected the sale and how lawfully the buyer declared tax deductions.

Thus, today desk audits for VAT are practically equal in depth and capabilities to on-site audits.

And it’s no secret that the construction industry accounts for the most claims in relations with unscrupulous contractors.

Let's look at how tax authorities promote such schemes.

First of all, obviously, the inspection must prove the bad faith of the counterparty.

Signs of an unreliable counterparty include:

— mass registration address;

— mass director/founder;

— negative personality of the director/founder (persons without a fixed place of residence, drug addicts, convicts);

— failure to submit reports/submission of reports with minimal amounts of taxes (not comparable to the company’s turnover);

— no connection with the company (does not respond to requests from tax authorities; is not located at the legal address);

— lack of equipment and personnel; operating expenses inherent in business activities;

— transit nature of account transactions;

— lack of SRO, permitting documentation;

— refusal statements from the director (founder) of the counterparty (“I don’t know this one,” “An acquaintance asked me to”); in a word, I am not me, and the horse is not mine, and I am not the cabman.

- handwriting examination, according to which the signatures on the documents were not made by the director, but by an unknown person.

It should be noted that the presence of any of the signs does not make the company a fly-by-night company.

Moreover, you should always double-check the tax office’s findings. So, in our practice there was an interesting case: the inspection claimed that the company was registered at a mass address. We went there on our own and found that in this building, in addition to fully functioning shops, there are departments of government agencies, including the prosecutor’s office. Thus, the conclusion about the mass registration address is conditional. For example, the list of mass addresses on the website of the Federal Tax Service of Russia includes the Karavan trade and office complex (Spartakovskaya, 2) and the Kazan IT park (Petersburgskaya, 52).

Therefore, in addition to the unreliability of the counterparty, tax officials must prove the absence of reality of business transactions. Such evidence, as a rule, is the testimony of the taxpayer’s employees (“I don’t know the contractors,” “I didn’t see anyone, we did everything ourselves”), errors and inconsistencies in the documents.

For example, when a contract is concluded with a subcontractor and the documents are signed after the work has been delivered to the customer.

Or worse, when at the time of concluding the contract the counterparty was not yet registered. We are talking about cases when the contract indicates all the details of a company that was not registered at the date of the contract. And here there are two options: either obvious falsification, when they “drew” the document and missed its date, or in the state the winner of the battle of psychics who guesses the future tax identification number and current account number. Courts usually favor the former.

In addition, very often construction contracts (especially when it comes to large projects) contain one important condition that careless taxpayers forget about. This condition is about the mandatory agreement of the involved subcontractors with the construction customer.

Another Achilles heel of aggressive optimization is working at sensitive facilities with a access system.

According to Rostrud, approximately 25% of citizens receive salaries in envelopes

For example, one Nizhnekamsk company hired subcontractors to carry out construction work at the facilities of Nizhnekamskneftekhim OJSC, but, judging by judicial acts, forgot to issue permits for the employees and equipment of the subcontractors. During the audit, tax officials turned to the petrochemical giant. The latter reported that he had not issued any passes to subcontracting companies. The interrogated individuals to whom the passes were issued also did not confirm their connection with these companies.

The situation was aggravated by the seals and 1C database of one of the counterparties, blank sheets with seal impressions of another, and Excel files with primary documentation on behalf of a third that were seized by operatives in the taxpayer’s office. All this suggests that the work was actually carried out by the taxpayer himself, but not by those companies that he proudly calls subcontractors.

The result of the painstaking and well-coordinated work of tax officials and operatives was additional assessments in the amount of over 80 million rubles. And the courts recognized their legality. On March 23, 2020, the Arbitration Court of the Volga District left the company’s cassation appeal unsatisfied.

Such complaints are by no means uncommon. In our practice, we conducted a similar case - the sensitive object was then the territory of the taxpayer himself. As evidence of the unreality of the work, the inspection referred to the log of entry of equipment and visits, in which there was no mention of the company's counterparty.

However, a careful study of the document showed that the journal was kept by private security company employees in bad faith. In particular, the “Company” column was simply not filled in. At the same time, the log recorded the entry of numerous cargo vehicles during the disputed period. But the tax authority did not determine who owned the equipment, as a result of which the court declared the tax authority’s additional assessments unlawful. Always, always dig deeper, double-check your conclusions - when you get closer, the situation may not be so clear-cut.

Finally, tax authorities must prove that the company failed to exercise due diligence and care.

The charter of the counterparty will not surprise anyone now. The courts weigh very carefully the reasons for selecting a supplier or subcontractor.

Evidence of the taxpayer’s control of the one-day fund is:

— stamps, forms, originals of constituent documents, 1C databases, electronic files of counterparties seized from the taxpayer’s office (which is what the Nizhnekamsk company was caught on);

— the taxpayer is the only client of the counterparty;

— interdependence of companies (for example, when the founder/director of the counterparty is an employee of the taxpayer);

— coincidence of IP and MAC addresses.

Advice. If working under proven schemes is not your conscious choice, carefully record and retain evidence of the reality of the transactions and due diligence. The courts recognize as such business correspondence, evidence of personal meetings with the management and employees of the counterparty, justification for choosing a supplier (written recommendations from partners, business cards, advertisements, tenders), litigation with the counterparty.

2. BUSINESS DIVISION

Recently, tax disputes related to business division have been gaining momentum. The construction industry has not been spared such cases either.

Here is a clear example of what not to do.

Novosibirskaya, together with SMU-1 Materialstroyservis LLC and SMU-2 LLC, carried out the construction of houses under contract agreements for one customer.

In this case, the tax authorities established the following circumstances:

the construction of houses was carried out in one microdistrict, the construction site was fenced with one fence;
organizations carried out the same types of activities;
organizations used a single production complex;
organizations purchased the same building materials used at one construction site, which were delivered by pick-up using the same transport and unloaded in one place for the construction of all houses;
tools were issued to all workers in one place;
wages were paid by the same person;
employees were hired by the same director and had a single management;
one time sheet was kept for all construction site workers by one storekeeper;
personnel records were carried out by one person;
when transferring from one company to another, working conditions, workplace, construction projects, wages did not change;
brigades were formed from employees of all organizations;
all workers received special clothing from one person;
workers changed clothes and had lunch in the same trailers;
Witnesses could not explain which houses each of the three organizations built.

As we can see, the inspectors did a serious job. As a result, the income of all three companies was added up and taxed according to the general tax system (due to the loss of the right to “simplified taxation”). And the courts supported the tax authorities, recognizing the splitting of the business into several companies as a scheme. Additional charges in this illustrative case amounted to over 150 million rubles.

It should be noted here that running a business through several legal entities does not in itself indicate a scheme. In the end, any holding is built on this principle.

But in the event of a claim, the taxpayer must be able to justify a business purpose for separating the business (other than tax savings). For example, the reasons for transformations may be reducing the risk of losing business, dividing activities into different legal entities in order to increase the efficiency of business management, promoting into regional markets under a new name (promoting a new brand), abandoning certain unpromising activities, dividing business between co-founders.

In the case considered, this postulate was violated.

3. INVOLVING UNOFFICIAL WORKER Crews, PAYMENTS IN ENVELOPES

According to Rostrud, approximately 25% of citizens receive salaries in envelopes.

The main factor in favor of covens and payments in envelopes is the high tax burden on business. After all, from a salary of 30 thousand rubles, the organization withholds and transfers 3.9 thousand rubles to the personal income tax budget and additionally pays over 9 thousand rubles in insurance premiums (together with contributions “for injuries”).

Let's see how unofficial workers (and payments in envelopes) are identified in practice.

Worker complaints. Employees can complain to the labor inspectorate, law enforcement and tax authorities, and funds. Recently, such an opportunity has appeared on the website of the Kazan Executive Committee.

The fact that unofficial payments deprive an employee of a future pension is trumpeted by social videos from TV channels. We deliberately do not raise questions and discussions about the enviable frequency with which the pension system is updated, how freely the state treats the funded part of the pension, and what will happen to pension points in 5 - 10 - 30 years.

And if a 20-year-old worker is not particularly worried about old age today, people of pre-retirement age are a different matter.

Seizure of black accounting. During seizures by tax authorities or searches by operatives, inspectors often find notebooks, unaccounted payroll statements, cash books and cash receipts (including those stored in computer memory or on electronic media).

Accidents on site, follow-up inspections.

Coordination of the list of workers involved at the site with the construction customer is normal practice. And the tax authorities know about this. This means that requesting such information will not be difficult. The same applies to the log of issued passes at sensitive facilities.

Indirect evidence. The company's posting of vacancies, 2-NDFL certificates provided by employees to the bank, with a salary level higher than stated, are considered by the courts in conjunction with other evidence.

Risks. The negative consequences of payments in envelopes do not particularly frighten entrepreneurs. But is everything so rosy?

Fine under Art. 5.27 Code of Administrative Offences. The amount of the administrative fine for evasion or improper execution of an employment contract does not exceed 100 thousand rubles. For most builders, this means it's easier to pay than to work legally.

Additional calculation of personal income tax and insurance premiums. If you look at it, charging additional personal income tax to a company (more precisely, not the tax itself, but a fine for failure to perform the functions of a tax agent) and insurance premiums is not so simple in practice.

Indeed, in addition to the very fact of unofficial payments, inspectors must prove the amount of payments to a specific employee. And the testimony of employees alone (who, as a rule, cannot name exact amounts) is not enough, as well as unofficial statements, if they do not contain the signatures of employees and representatives of the organization, or if their content does not allow reliably identifying each employee who received income, amount and payment period.

Nevertheless, cases where tax authorities take a high-quality approach to collecting evidence have become more and more common lately.

And from 2020, when the administration of insurance premiums will be returned to the tax authorities (the President of Russia made such a proposal in January), inspectors will have even greater incentives to identify such payments.

Criminal liability. Today, bringing an employer to criminal liability under Article 199.1 of the Criminal Code of the Russian Federation for failure to fulfill the duties of a tax agent, that is, for failure to withhold personal income tax from employees and failure to transfer personal income tax, is hampered by the clause that such failure must be committed in personal interests, and the presence of personal interest must be proven in fact not easy.

The situation promises to change with the introduction of criminal liability up to imprisonment for non-payment of insurance premiums on a large and especially large scale (on February 18, 2020, the State Duma adopted the corresponding bill in the first reading).

According to the text of the bill, evasion of more than 2 million rubles over three financial years is proposed to be considered large for organizations, if this is more than 10% of the payable amount of insurance premiums, or evasion of more than 6 million rubles. And especially large - from 30 million rubles or more than 10 million rubles for three years, if this is more than 20% of the total amount of contributions. For individual entrepreneurs, the bar is lower.

To understand the situation: 2 million rubles of unpaid insurance premiums is 6.7 million rubles of payments in envelopes for three years (or 185 thousand rubles per month). As you can see, the numbers are far from exorbitant.

In addition to the above, there are also additional risks and costs that are not obvious at first glance.

Since cash is required to pay gray salaries, and also trying to compensate for the inflated tax base for income tax (after all, for obvious reasons, shadow payments are not taken into account in expenses), enterprises, as a rule, cover the volumes with fictitious acts, withdrawing money to the same companies - ephemera. In other words, a double risk arises in the form of refusal to account for income tax expenses (and VAT deductions) and additional assessment of insurance premiums and sanctions for non-payment of personal income tax.

One should not lose sight of the fact that the employer will almost always be unable to recover property appropriated by an unofficially employed employee.

Advice. An alternative solution is to attract registered (in the form of individual entrepreneurs or LLCs) teams of workers. Few people know that, for example, in Tatarstan there is a preferential rate for them on the “simplified tax” (5%) and insurance premiums (20% instead of 30%) for builders. In addition, the issue of introducing tax holidays for individual entrepreneurs registered for the first time is currently being considered (we are talking about exemption from the simplified tax system for the first two years). Yes, in this case the company will not have input VAT, but in the current conditions, aggressive optimization only gives the illusion of security.

4. LATE REGISTRATION OF THE CONSTRUCTION PROJECT

Very often, constructed real estate objects begin to be exploited long before the final registration of rights to these objects. In practice, it may take several months, and sometimes several years.

At the same time, the reasons for untimely registration of construction projects are different. In some cases, the delay is caused by the taxpayer’s dishonesty and negligence, in others the delay is caused by circumstances that are objectively beyond the taxpayer’s control, for example, the need for contractors to eliminate hidden deficiencies identified after signing the report.

However, if the object is actually operated, tax authorities will assess additional property tax even in the absence of a commissioning act and registration of rights to the object. The courts take the approach that the obligation to pay property tax should be determined based on the economic essence of the object and cannot depend on the will of the taxpayer to formalize his ownership of the object.

This is what happened with Samara. The taxpayer built a car dealership in the Samara region, but was in no hurry to register the facility. Tax officials provided the following evidence of the actual operation of the facility:

announcements on the company’s website about the opening of the largest technical center located at a disputed address; about working hours on holidays;
explanatory notes from the company, according to which the company during the disputed period sold and serviced cars at the address of the car dealership (obviously, the explanations were given outside of connection with this check);
primary documents confirming the provision of controversial activities;
payment of bills for gas, electricity, communication services, Internet; sharp increase in electricity bills;
an inspection protocol that records the condition of the disputed premises, the fact of conducting business activities during the disputed period;
a lease agreement under which part of the premises is leased to another company;
testimony of company employees who confirmed the conduct of activities in the disputed premises during the audited period;
testimony of a taxpayer client who was served in the disputed premises during the audited period;
resolution of the State Construction Supervision Inspectorate, which established the operation of the facility without permission to put a capital construction project into operation; repeated prosecution for failure to comply with the instructions of the supervisory authority;
terms of the dealer agreement.

As we can see, there is evidence of the facility’s exploitation. At the same time, the courts did not take into account the taxpayer’s arguments that the cost of the object had not been formed (since finishing work was being carried out).

It should be noted that in such cases the importance of judicial discretion is great.

An interesting example is the Kazan case (regarding the shopping complex and hotel of the same name). The tax office assessed additional property tax for 2013 based on data on the actual operation of the facilities. At the same time, neither the acts of Gosstroynadzor on the operation of facilities without issuing a permit for commissioning, nor the official opening of the complex, nor the conclusion of lease agreements and the implementation of business activities by some tenants in the facility under construction convinced the judges about the suitability of the disputed facilities for operation in the period under review. It is worth mentioning that the case has not yet been considered in cassation (link to the case - https://docs.pravo.ru/document/view/72600396/83995146/).

5. USING THE GARDEN PREVENTION _

The Tax Code provides for a land tax benefit in relation to land plots acquired (provided) for dacha farming. For such areas the tax rate is 0.3% (versus the general rate of 1.5%). This benefit was used by many developers constructing dacha complexes.

The Moscow region was no exception. Owning agricultural land with the permitted type of use “for dacha farming” and “for dacha construction”, the company paid tax at a reduced rate. During the inspection, the inspection refused the preferential rate.

The courts of all three instances supported the company. They noted that the status of the land owner does not matter if the law establishes a preferential rate specifically for land without reference to the characteristics of the owner.

But the Supreme Court of the Russian Federation (ruling dated May 18, 2015) decided differently, indicating that only non-profit organizations and individuals who directly use land to satisfy personal needs when running a dacha farm or dacha construction, and not for the purpose of making a profit, can take advantage of the benefit .

Advice. If you are the owner of garden plots, we recommend that you independently clarify your tax obligations by paying additional taxes and penalties. This will eliminate the fine. Otherwise, be prepared to defend your position in the Constitutional Court of the Russian Federation.

Guzel Valeeva, Yulia Zazdravnaya

PS The format of the article does not allow us to cover the entire layer of tax risks inherent in construction - overestimation of the cost of work, accounting for capital investments as the cost of current repairs, accounting for material costs in excess of the construction estimate, the emergence of a separate division at a construction site, complex issues regarding the DDU, etc. We promise consider them in upcoming materials on the BUSINESS Online website.

Guzel Valeeva is a senior partner at the law firm.

Education: Kazan State Financial and Economic Institute with a degree in taxes and taxation; Moscow State Law Academy named after. Kutafina (MSAL) with a degree in civil law.

Speaker of the international conference “Tax Law in the Decisions of the Constitutional Court of the Russian Federation”, Volga Tax Forum and other industry conferences.

Author and presenter of seminars “Tax Security System”, “Tax Disputes: Protection of Taxpayer Rights”.

Yulia Zazdravnaya is a managing partner of the legal company.

Education: Kazan State Institute of Finance and Economics, majoring in taxes and taxation.

Speaker of the international conference “Tax Law. Experience of Russia and other countries”, Volga tax forum and other industry conferences.

Author and presenter of seminars “Tax Risk Management”, “Effective Representation of Taxpayer Interests in Court”.

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Evidence of effectiveness and justification of costs

In practice, the question arises: “How to prove the effectiveness of expenses and their validity?”

The answer to this question is both simple and complex at the same time. It is simple, since you only need to prove the intention to make a profit, but complex, since this proof will require the ingenuity of the taxpayer and the preparation of a significant number of documents:

prepared supporting documents (memorandums, orders, contracts, etc.), which will indicate the need for the taxpayer to incur costs: for example, by stipulating in the employment contract with the employee the obligation to feed him, the taxpayer has the opportunity to include these costs in the calculation of income tax (if compliance with other provisions of Article 252 of the Tax Code of the Russian Federation) on the basis of paragraph 25 of Art. 255 Tax Code of the Russian Federation;
primary accounting documents recording completed facts of economic life;
monitoring documents, i.e. related to confirmation of due diligence and subsequent control over the counterparty to the transaction or control of the internal operations of the taxpayer.

For a taxpayer, it is sometimes important to prove to himself the economic feasibility, namely expediency, and not justification, that is, to understand for himself why any expenses are needed, how they will affect the receipt of income in the future. If this is done, then there will be no problems with the economic justification of expenses for the tax authorities.

Indicative in this regard may be the case on the validity of loans (Decision of the Supreme Court of the Russian Federation dated June 17, 2019 No. 309ES19-7907 in case No. A7610867/2017). The case is interesting because of the amount charged to the taxpayer:

additionally assessed corporate income tax in the amount of RUB 106,704,578;
penalties for corporate income tax in the amount of RUB 21,756,772. 48 kopecks;
fine for corporate income tax in the amount of RUB 15,190,100. 30 kopecks

The essence of the matter is that the taxpayer took out interest-bearing loans (and the interest was not inflated), and gave these loans at a lower interest rate or without interest to interdependent persons.

The decision in favor of the tax authority was firmly established in all instances.

It is obvious that in these transactions there is neither justification nor expediency of the expenses incurred. From the point of view of a group of companies, such transactions are quite reasonable, but from a tax point of view, they are not.

Moreover, an analysis of judicial practice shows that if the taxpayer has prepared and justified the expenses, then the tax authority does not dispute such circumstances, and if a tax dispute begins, then the tax authority has clear signs of unjustified expenses. Therefore, judicial practice is developing in favor of the tax authorities.

So, if the process of proving economic feasibility is often subject to the taxpayer and it is possible to justify expenses, then when it comes to due diligence, everything becomes more complicated: the parameters of diligence are not spelled out in the legislation and there are no absolute algorithms for exercising due diligence. To better understand this problem, let us turn to the history of the issue.

Enterprise income tax risks

If the tax risks arising when concluding an agreement or when working with VAT concern both legal entities and individual entrepreneurs, then exclusively the tax risks of the organization include tax risks for income tax (provided that the organization operates on OSNO).

In connection with income tax, risks arise primarily in relation to the validity of expenses taken into account in reducing the base for this tax. The role here will be played by:

presence/absence of suppliers classified as problematic counterparties and dubious transactions;
reasonableness of prices used in transactions with suppliers;
compliance of costs with the criteria for the possibility of accepting them as expenses, including in terms of reference to the limits established for this;
the ratio of income and expenses, which is reflected, among other things, in the level of profitability of the activities carried out;
validity of losses of previous years.

Simplifiers (both legal entities and individual entrepreneurs) working with the “income minus expenses” object will have to focus on similar indicators.

To learn about which expenses under the simplified tax system are taken into account according to the rules of Chapter 25, read the article “List of expenses under the simplified tax system “income minus expenses”.”

The importance of due diligence

When a taxpayer cares about the validity of expenses, then everything depends only on him (his employees and their timely actions). When it comes to due diligence, only the collected package of documents depends on the taxpayer himself, and everything else depends on the counterparty and the tax authority, which may decide that after three years the taxpayer worked with an unscrupulous supplier or buyer.

As a result, all tax risks are immediately transferred to the bona fide taxpayer only due to the dishonesty of his partners.

From the taxpayer’s point of view, this is the highest injustice, and from the point of view of the fiscal interests of the tax authority, it is an excellent opportunity to replenish the budget.

The concept of due diligence was first introduced in the Resolution of the Plenum of the Supreme Arbitration Court No. 53 of October 12, 2006. Thus, paragraph 10 states that the fact that the taxpayer’s counterparty violates its tax obligations does not in itself constitute evidence that the taxpayer received an unjustified tax benefit.

A tax benefit may be recognized as unjustified if the tax authority proves that the taxpayer acted without due diligence and caution and he should have been aware of violations committed by the counterparty, in particular, due to the relationship of interdependence or affiliation of the taxpayer with the counterparty.

A tax benefit may also be recognized as unjustified if the tax authority proves that the activities of the taxpayer, its interdependent or affiliated persons are aimed at carrying out transactions related to tax benefits, mainly with counterparties that do not fulfill their tax obligations.

After such conclusions from the judges, accusations of taxpayers for failing to exercise due diligence became practically the norm, and the tax authorities boldly began to prove in court that the taxpayer did not conduct the required amount of audits of the counterparty’s activities. The following facts serve as a basis for charges of failure to exercise due diligence:

the counterparty was liquidated within 3 years from the date of the transaction;
the head of the counterparty did not appear for questioning;
the counterparty does not submit VAT returns;
the counterparty does not pay the declared VAT, etc.

The use of the concept of “due diligence” by tax authorities made it possible to blame taxpayers for non-payment of taxes by their counterparties, and the courts for the most part began to support this concept. Moreover, if a tax dispute involved a large amount (several tens of millions), then, as a rule, it was resolved in favor of the tax authorities. If the amount in dispute is insignificant (1-2 million), then the taxpayer had every chance to prove the so-called “due diligence”.

The fact is that past and existing legislation does not contain ready-made algorithms and approaches, following which the taxpayer would receive an “indulgence”; therefore, being a subjective assessment, due diligence leads to a certain arbitrariness on the part of the tax authorities and the judicial system.

In his numerous letters (from 06/21/2017 No. 03-12-11/2/39116, from 02/13/2017 No. ED-415/ [email protected] , from 12/13/2016 No. 03-02-07/1/74372, from 07/12/2016 No. 03-01-10/41099, dated 06/24/2016 No. ED-1915/104, dated 10/16/2015 No. 0302-07/1/59422, dated 03/16/2015 No. ED-4-2/4124, dated 12/17/2014 No. 03-02-07/1/65228) The Federal Tax Service and the Ministry of Finance of Russia disclosed some criteria for due diligence, which a taxpayer should pay attention to when choosing a counterparty. According to officials, the following circumstances should be checked:

lack of information about the state registration of the counterparty in the Unified State Register of Legal Entities (this is a very old criterion, which is practically not used after the introduction of ASK);
registration of the counterparty at the “place of mass registration”;
presence of the counterparty's head on the list of disqualified persons;
lack of documentary evidence of the authority of the counterparty's representative, copies of his identity document;
lack of information about the actual location of the counterparty, as well as the location of its warehouse and (or) production and (or) retail space;
lack of obvious evidence of the possibility of the counterparty actually fulfilling the terms of the contract;
existence of reasonable doubts about the possibility of the counterparty actually fulfilling the terms of the contract, taking into account the time required for delivery or production of goods, performance of work or provision of services;
inclusion by the parties into the contract of additional conditions that are unfavorable for the counterparty or not related to the subject of the contract.

The list goes on, since there are a lot of possible options for “wrong” behavior. The actual actions of the taxpayer in checking the counterparty can always be called into question and considered insufficient after the tax authorities have identified facts of dishonest actions of the counterparty after the transaction between him and the accused taxpayer.

Useful for taxpayers is the Letter of the Federal Tax Service of Russia dated March 23, 2017 No. ED-5-9/ [email protected] It notes that tax authorities need to pay special attention to assessing the sufficiency and reasonableness of the measures taken by the taxpayer to verify the counterparty, and also evaluate for receipt unjustified tax benefit is the dishonesty of the taxpayer being audited and the actions he performed (i.e., the diligence he showed in choosing a counterparty), and not the actions performed by the counterparties.

In addition, it is clarified that in order to assess the actions of a taxpayer it is necessary:

Assess the validity of the choice of counterparty by the audited taxpayer.

Explore questions:

whether the choice of counterparty differed from the conditions of business turnover or the practice established by the taxpayer himself in selecting counterparties;
How were they assessed?

terms of the transaction and their commercial attractiveness;
business reputation;
solvency of the counterparty;
risk of non-fulfillment of obligations;
the counterparty has the necessary resources (production capacity, technological equipment, qualified personnel) and relevant experience;

whether the taxpayer entered into transactions primarily with counterparties who did not fulfill their tax obligations.

Pay attention to the following:

lack of personal contacts between the management (authorized officials) of the supplier (contractor) company and the management (authorized officials) of the buyer (customer) company when discussing the terms of delivery, as well as when signing contracts;
lack of documentary confirmation of the authority of the head of the company - the counterparty, copies of his identity document;
lack of information about the actual location of the counterparty, as well as the location of warehouse and (or) production and (or) retail space;
lack of information about the method of obtaining information about the counterparty (no advertising in the media, recommendations of partners or other persons, the counterparty’s website, etc.).

In this case, one should take into account the availability of available information about other market participants (including manufacturers) of identical (similar) goods (works, services), including those offering their goods (works, services) at lower prices:

information on the state registration of the counterparty in the Unified State Register of Legal Entities;
information about whether the counterparty has the necessary license, if the transaction is concluded within the framework of a licensed activity, as well as a certificate of admission to a certain type or types of work, issued by a self-regulatory organization.

Request from the taxpayer documents and information regarding the taxpayer’s actions when choosing a counterparty:

documents recording the results of search, monitoring and selection of a counterparty;
source of information about the counterparty (website, advertising materials, proposal for cooperation, information about the counterparty’s previously performed work);
results of monitoring the market for relevant goods (works, services), studying and assessing potential counterparties;
documented justification for choosing a specific counterparty (a fixed procedure for control over selection and risk assessment, procedure for conducting a tender, etc.);
business correspondence.

As part of the application of the provisions of sub. 1 and 2 paragraphs 2 art. 54.1 of the Tax Code of the Russian Federation, the tax authority must prove that the main purpose of the taxpayer’s conclusion of a transaction (operation) was not to obtain the results of business activities, but to obtain tax savings (if facts of non-compliance with the conditions specified in subclause 1 of clause 2 of Article 54.1 of the Tax Code of the Russian Federation are revealed), and (or) that the transaction (operation) was not executed by the declared counterparty, and the taxpayer used formal document flow for the purpose of unlawfully accounting for expenses and claiming tax deductions for the disputed transaction (operation) (if facts of non-compliance with the conditions established in subclause 2 of clause 2 of Art. 54.1 Tax Code of the Russian Federation).

If circumstances are established indicating that the main purpose of the taxpayer entering into a transaction (operation) was not to obtain results of business activity, but to obtain tax savings, the tax authorities must prove that such a transaction (operation) does not have any reasonable explanation from the standpoint of the economic necessity of it conclusion and commission, but is intended only to reduce tax liabilities and (or) is part of a scheme, the main purpose of which is to reduce tax liabilities.

At the same time, of course, it is necessary to take into account that the provisions of the Tax Code of the Russian Federation do not limit the very right of taxpayers to conduct their business transactions in such a way that the tax consequences are minimal. The transaction (operation) option chosen by the taxpayer should not contain any sign of artificiality, devoid of economic meaning.

In addition, the tax authority does not have the right to insist that the taxpayer should have chosen one or another option for constructing business transactions.

All of the above explanations of the application of Art. 54.1 of the Tax Code of the Russian Federation indicate that the new approaches are essentially identical to the concept of “due diligence”, but taking into account the direct rules of Art. 54.1 of the Tax Code of the Russian Federation is not allowed to apply such wording to them.

Based on the above, the results of checking the activities of the counterparty (previously due diligence) should be recorded in a report that the organization develops independently. The report must be accompanied by a package of materials that relate to this audit.

If the audit is not carried out, then there is a risk that the results of the audit may reveal facts that will lead to the denial of VAT deductions, expenses, offsets or tax refunds. For example, due to the fact that the counterparty is a shell company and the obligations under the contract were not fulfilled by the person indicated in the documents.

Some services offer ready-made packages to prove due diligence, and it turns out that it is easier and cheaper to pay money and receive a ready-made report than to spend time and effort on collecting evidence of verification of the counterparty yourself.

The very fact of having reports in court will make it possible to characterize such a taxpayer as conscientious and responsible, but will not give anyone any guarantee of a final and complete victory in a tax dispute.

The essence of the problem

Tax type risk, or TD for short, most often arises from the desire to save on fiscal burden. It turns out that an enterprise or entrepreneur, due to an interest in a smaller state fee, violates certain rules. But such a moment does not always occur due to a deliberate and independent decision. There are a number of HP factors that may affect the irrelevance of the tax base:

illiteracy of the subject in the financial and legal sphere;
the current legislation has received an incorrect form of interpretation;
fiscal norms and a number of taxation rules have duality;
information about changes to the legal framework was not received;
technical errors;
counterparties are dishonest, which affects the entire system as a whole.

Important! Risks arise both from direct violation of legislative norms and the Tax Code of the Russian Federation, and from indirect violation. Any form of violation has consequences, including in the financial sphere. However, unintentional violations do not relieve liability.

If a violation is detected, the subject comes under the supervision of the Federal Tax Service, in particular, on-site inspections are initiated, which make it possible to assess all risks on the spot.

Risks can arise from various actions, including illegal ones. Among them:

contractors were selected without preliminary verification;
employees were registered as individual entrepreneurs and received a civil law contract;
offshore companies are used in the form of illegal schemes or special companies;
an illegal division of the business was carried out;
the staff turned out to be rented, that is, appropriate contracts were not concluded with them for the absence of additional payments;
use of transfer pricing.

IOs when concluding an agreement may arise if there was a deliberate inclusion of a dubious person in the list of counterparties or if sufficient verification of information about the partner was not carried out. In both cases, liability will be assigned to the person who is the taxpayer. This point is recorded in the order of the Federal Tax Service of the Russian Federation No. MM-3-06333.

Factors determining tax risks

To eliminate IR when making transactions on a contractual basis, you will need to follow several rules:

collection of comprehensive data on the partner’s activities in the form of a package of documents, rather than oral recommendations;
the procedure for agreeing on conditions is carried out with evidence of the fulfillment of the agreement and the reality of the transaction;
with the help of documents, the choice of the counterparty is confirmed on the basis of validity and information on prices and other factors;
all conditions with payment, deferments and penalties must be justified and included in a disclosed form in the contract.

If the partner violates the agreement, the taxpayer will have evidence in hand indicating an attempt to recover the amount of damages.

How tax risks are analyzed

When examining the risks for a particular enterprise, a specialist does the following:

Develops a business process model.
Collects and analyzes accounting and analytical data.
Recognizes risks.
Assess risks qualitatively.
Quantifies risks.
Identifically assesses risks.
Makes a preliminary decision on action/inaction.
Develops a plan to minimize risks.
Makes the final decision.

The importance of tax risks in economic development