The overview of court practice on tax disputes in November 2015
Attracting the payer to liability for failure to provide documents, the inspection stated that may ask to check any documents. In particular, previously submitted. Also on pointed to the fact that acquaintance with original documents does not relieve the taxpayer from the obligation to provide copies of these documents. The arbitration court of far East district with a similar position is not agreed and accepted the decision on attraction of the payer to liability invalid. In the Decree № F03-4126/2015 from 25.11.2015, the court explained that the law sets several limitations for discovery of documents from the payer. So, you cannot claim notarized copies of documents submitted to the tax authority. The tax authorities are not entitled to request from the audited entity documents previously submitted to the tax authorities when holding cameral or field tax audits.
Also not required to provide documentation in the form of certified copies in the course of conducting tax monitoring. This restriction does not apply to cases where documents previously submitted to the tax authority in the form of originals subsequently returned to the inspected person. Also this restriction does not apply to cases where the documents submitted to the tax authority, were lost due to force majeure. The courts determined that the requested inspection documents are not submitted by the taxpayer by reason of default by the tax authority authentic copies of the documents submitted by the company previously. Because the society was not able to fulfill the requirement of inspection about the submission of these documents, the courts came to the correct conclusion about the absence in this case of the offense.
Payer acquired the property with the defects. The inspection concluded that the property purchased cannot be used for operations deemed to be objects of VAT taxation, and denied the deduction
The tax authority is taking this decision, concluded that the right to receive tax reimbursement from the applicant because the purchased real estate in need of major repairs. Accordingly, these objects cannot be used for operations subject to VAT and get a tax deduction impossible. Having considered the case materials, the Arbitration court of the Ural district recognised that defects in the purchased property do not prevent obtaining VAT deductions. Ultimately, the court acknowledged the Inspectorate's decision invalid. In the Decree № F09-8786/15 from 25.11.2015, the court pointed out that tax deductions are made on the basis of the invoices exposed by sellers at acquisition by the taxpayer of goods. Courts set and materials of the case confirmed that no tax audit, nor in the contested decision, on not given information about what exactly is the discrepancy between the requirements of the tax code, the taxpayer issued invoices.
However, the fact of billing organizations, vendors inspection is not disputed. In addition, the courts established the fact of transfer to the society of real estate. The argument that the purchased property may not be used for operations deemed to be objects of VAT taxation, because the object is in an alarm condition, the court is not accepted. Objects can be repaired and used for its intended purpose. Including for transactions subject to VAT. This amount of VAT paid when purchasing goods, are tax deductible in the period when these goods are purchased and taken on record and not in the period when the goods are actually used. Consequently, the taxpayer was entitled to deductions not related to the time of use of goods.
The developer receives money from shareholders, the tax credit additionally VAT
In making a decision on additional tax, on assumed that the funds received under contracts on joint construction are associated with the implementation. Therefore, according to the tax authorities, they were subject to taxation on value added. The arbitration court of Volgo-Vyatsky district recognized such actions of tax inspection are contrary to the tax code and violating the rights of the taxpayer. In the court of the Resolution № A43-31004/2014 from 23.11.2015 explained that is not recognized as subject to VAT the transfer of assets, if such transfer is of an investment nature. The courts found that the payer under contracts of participation in share construction carried out the construction of the house. The society-Builder is obliged to build a house and to convey to the investors of the object of shared construction.
Real estate investors are obliged to pay the contract price and in the presence of the permission to commissioning of object make the real estate property. The developer uses funds paid by the participants of share building under the contract solely for the construction of apartment buildings. Thus, the agreement of participation in shared construction is an investment character, as the funds received from shared construction participants, are targeted by virtue of the law. Therefore, cash received by the taxpayer performing the functions of a Builder, from shareholders under agreements on share participation in the construction of residential homes are not subject to VAT. This is because the relationship between the shareholders and the society investment character.
The Inspectorate issued the decision on suspension of account transactions in the Bank. The taxpayer is unable to open new accounts in other banks
The arbitration court of West Siberian district recognized that in the case of suspension of account transactions the Bank may not open new taxpayer accounts. However, this rule applies only in cases where the Bank knows about the freezing of the account. In Resolution # A75-4465/2015 from 30.11.2015 court pointed out that the opening of Bank accounts with the respective decision of the tax authority to suspend transactions on the accounts of this person will result in a fine. The objective side of this offence is the opening of Bank accounts with the respective decision of tax authority on suspension of operations under accounts of the person. In the presence of a decision on suspension of operations on account the Bank may not open accounts and to provide the organization the right to use new corporate electronic payment media for transfers of electronic money.
Suspension of operations on the taxpayer's account in one Bank entails a ban on the opening of accounts not only to the Bank, which suspended operations on accounts of a taxpayer, but to other banks. The courts found that the Bank made the account opening of society, despite the decision on suspension of operations under accounts of the companies. In connection with the specified circumstances the decision of the tax authority, the Bank was subject to tax liability. The court explained that this decision would be consistent with the law in the event that the Bank knew about the suspension of transactions on accounts. Meanwhile, as the decision on stay of operations under Bank accounts had not been sent grounds for bringing the Bank to the tax liability were not available.
The taxpayer did not check the business reputation and creditworthiness of their counterparties. The tax deduction of VAT may be refused
The arbitration court of the Volga district recognized that the verification of constituent documents of the counterparty and the registration is not an indication of due diligence. Even if the partner has been registered and is formally valid legal entity, obtaining tax benefits can still be denied. In Resolution No. Ф06-2839/2015 from 25.11.2015 the court explained that the choice of counterparties are evaluated not only on the terms of the transaction and their commercial appeal, but also business reputation, creditworthiness of the counterparty. Also, the payer is obliged to assess the risk of default, a counterparty of necessary resources and relevant experience. The adverse consequences of insufficient due diligence in business activities fall on the person who has entered into such transactions. They can't be transferred to the Federal budget by reducing tax liabilities and the implementation of unreasonable payments.
And in the case of unscrupulous contractors, the taxpayer bears a risk not only for the enforcement of civil contracts, but in the context of tax legal relations. Of the requirements of the tax code, he loses the ability to produce tax deductions on VAT due to the absence of a duly executed primary documents. In itself a transaction with a legal entity having INN, Bank account and address, which may indicate on its registration, is not an unconditional basis for tax benefits in the form of tax deductions. If, at the time of contractor selection, the taxpayer properly carried out check of legal capacity of this legal entity and authority of its representatives, has not verified the validity of the documents presented, he loses the right to deduct VAT.
Employees of the taxpayer for a long time at the customer's site. Tax inspection demands to open the place up a separate division
The arbitration court Severo-the Caucasian district has recognized that the presence of contractor employees at the construction site of the customer over a long period of time does not oblige to register a separate subdivision for this place. In the Decree № A32-2976/2015 from 26.11.2015 the court explained that the responsibility for the conduct of activities organization or individual entrepreneur without registration with the tax authority. Meanwhile, the recognition of a separate division of the organization as such is possible, while respecting a number of conditions. These include — the presence of territorial isolation; fixed jobs and maintenance activities across the unit staff organization. Thus, under the stationary equipment of the workplace means not only the creation of conditions for the performance of work duties and the execution of such duties.
As evidence of the creation of a separate division may be, including the lease of the premises. Evidence to include labor contracts with employees in which the workplace of an employee is the location of the separate subdivision. The finding of contractor employees at the construction site of the customer over a long period of time is not itself the creation of stationary workplaces. The fact that the direction of employees on business trips were carried out by groups, it does not testify that in this way the society was created in the place of travel separate structural unit. Given the above, the courts came to the correct conclusion that the society was not to create a separate unit and put it on the tax registration at the place of execution of contract work. At the same time of the inspection there were no legal grounds for attraction of companies to the tax liability.
SP can convert the land tax on the basis of the results of the market assessment of the site
The tax authority assessed additional entrepreneur land tax, arguing that the changed cadastral value of the plot in the current period the application is not subject. The arbitration court of the Central district acknowledged the Inspectorate's decision invalid. In Resolution No. F10-3892/2015 from 25.11.2015, the court noted that to establish the cadastral value of land is conducted by the state cadastral assessment of lands. In the case of determining the market value of the land's cadastral value shall be equal to the market value. The law allows establishing the market value of the land, and the ability of the cadastral value of land based on its market value.
Since the judgment of the court was ascertained market value owned by the owner of land, the cadastre office had to make information about this cost in the inventory from the moment the court decision comes into legal force. While the tax code does not contain a prohibition on a tax on a particular object of taxation with respect to time of the actions of various of the cadastral value of the object within the same tax period. Established by the court, cadastral value is used for calculating the tax base for the tax period in which filed an application for revision of the cadastral value. In such circumstances, the courts of first and appeal instances are lawful satisfaction the statement of the entrepreneur and recognised the challenged decision of tax authority invalid.
Sales of goods at a price lower than their customs value does not deprive of the right to deduction of VAT
To such conclusion the Arbitration court of the Moscow district, acknowledging that the customs value used for customs purposes exclusively and cannot be used for tax purposes. In the Decree № A40-7536/15 from 30.11.2015 court explained that a tax deduction must meet a number of conditions. This includes the importation of goods into the customs territory of the Russian Federation, VAT payment to the customs authorities the receipt of goods for consideration. The courts found that in the disputed period, the company acquired office equipment, conducted its import for further sale on the territory of the Russian Federation. Due to the fact that the customs value of imported goods exceeded the cost of implementing these products on the territory of the Russian Federation, the company had claimed VAT refunds.
The courts found that the company met all the conditions established by law for making deduction of VAT paid when entering goods into the territory of the Russian Federation. In fact, the sale of goods at a price below the customs value has in this case no legal significance. This is because the customs value is used exclusively for customs purposes (in particular for the calculation of customs duties, including VAT) and cannot be used as a benchmark market price. Also it is not applicable for the calculation of VAT on transactions of sale of goods in the territory of the Russian Federation. The courts rightly did not accept the argument of inspection that the activities are aimed at obtaining unjustified economic benefit, not profit, because the deduction is taken of VAT actually paid by the company. Compare wholesale prices with retail but also with the customs value of the goods is incorrect and not required by law.
Statement of tax deductions in a revised tax return does not extend the time to receive them
This was stated by the Arbitration court of the Ural district, recognizing that in the case of missing three-year period, the taxpayer may not claim the deduction. Even if the deduction was claimed later, in a revised tax Declaration. In the Decree № F09-9250/15 from 25.11.2015, the court indicated that the duty to confirm legitimacy and validity of tax deductions with the primary documentation lies on the taxpayer — the buyer of the goods. He acts as the subject applying at calculation of a total amount of tax payable to the budget, less the amounts of tax assessed by the vendor. If the amount of the deductions exceeds the total amount of tax, the positive difference shall be refunded to the taxpayer. With the exception of cases when the tax return was filed by the taxpayer upon expiration of three years after the end of the relevant tax period.
The provisions of the tax code that limit the period of Declaration of the tax deductions cannot be interpreted as establishing different rules in the absence of objective distinctions. In this regard, the right to tax may be exercised by the taxpayer only within the normal period, regardless of formed whether as a result of application of tax deductions surplus or deficit. Consequently, the rule on three-year deadline for filing a tax Declaration must be complied with by the taxpayer in the case of the inclusion of tax deductions under the VAT in filed amended tax returns. Thus, the court made the correct conclusion about the legality of the refusal of the tax authority in the adoption of a controversial period of tax deduction of VAT.