16 February 2016 Artem Kopylov
One of the clients of the Gudkov, Korelskiy, Smolyarzh law firm authorized us to represent him in a dispute with a tax office, which, after a desk tax audit, levied on the entity additional taxes and penalties of over 500,000.00 rubles and suggested that the company shall be prosecuted for tax violations through a fine of 20% of the assessed tax deficiency.
Essentially, the arguments of the tax office reduced to the fact that the taxpayer had unlawfully claimed deduction of the value added tax (VAT) paid to one of its contractors for the work carried out under an owner-contractor agreement and a paid services agreement. The tax authority identified a number of circumstances making it obvious that that contractor could not perform any work for objective reasons.
Artem Kopylov, a lawyer of the Gudkov, Korelskiy, Smolyarzh law firm, filed objections with the tax authority to the desk tax audit report, arguing that the deduction of the value added tax (VAT) paid by the entity to its contractor was requested lawfully. The lawyer asserted and supported by document the following conclusions made by the taxpayer:
- work at the site was actually in progress and a certain result had been achieved, which was transferred by the contractor to the taxpayer and, subsequently, delivered by the taxpayer to its customer;
- the taxpayer shall not be held liable for improper documentation by its contractor of its employment and civil relations with third parties who actually did the work, if it took reasonable care in making a transaction with such contractor and proved that the work had been performed.
In making the decision following the examination of the desk tax audit materials, the tax office sustained all the taxpayer's objections and refused to held the entity liable for a tax offence.
Thus, as early as on the pre-judicial phase of the dispute procedure, the firm managed to obtain for its client a positive decision, which considerably reduced possible financial and time inputs on the part of the entity.
Image source: http://www.hdigroup.co.za