Supreme Court Tax Disputes: January 2020

We offer a selection of tax disputes that fell into the focus of the attention of the Supreme Court in January 2020.

Subject1: tax audit, application of a higher tax rate, additional charge of 18 million rubles.

Judicial Act: determination of the Supreme Court No. 308-ES19-18258 of January 29, 2020 (operative part) and resolution of the Arbitration Court of the North Caucasus Area in case No. A53-21469 / 2017 of June 28, 2019.

What is the dispute about? The tax authority conducted an audit, as a result of which additionally charged the company for 18.2 million rubles of land tax plus penalties and fines. The reason was that the payer applied the rate of 0.3%  as for the land plots with TPU "for housing". The tax authorities considered that a rate of 1.5% should be applied - since no construction is underway, and the company has no goal of building anything. The courts upheld this decision. The taxpayer filed a cassation appeal with the Supreme Court, indicating that the law does not link the application of the rate with the fact of construction.

The Supreme Court overturned the judicial acts adopted in the case, recognized the decision of the tax authorities on the additional charge as invalid.

Subject 2: application of a normative legal act with more favorable regulation in relation to the calculation of a land tax.

Judicial Act: Supreme Court ruling No. 303-ES19-11712 of January 28, 2020.

What is the dispute about? The entrepreneur was accrued the land tax for 2016 on the basis of a resolution of the regional administration, dated December 30, 2010. The entrepreneur appealed to the court, believing that the decision of December 14, 2015 should be applied as it contains more favorable regulation.

The courts rejected the claims. However, the Supreme Court indicated that the act of December 14, 2015 should be applied as an improvement in the status of the payer. The dispute was sent for a new consideration to establish the amount of tax liabilities.

Subject3: tax audit with additional charges. Will the corrected reporting change the situation?

Judicial Act: Supreme Court ruling No. 309-ES19-21200 of January 20, 2020.

What is the dispute about? In 2011, the head of the peasant farm holding became an entrepreneur, the peasant farm holding ceased its activities. Until this moment, in 2010, loans were issued for the purchase of agricultural machinery.

Having paid off the debts to the bank in 2014 and 2015, the entrepreneur included funds to repay loans in the expenses. When checking it, the tax inspectors considered that these expenses should have been applied to the period of purchase of equipment.

In this regard, the entrepreneur received additional 1 million rubles of unified agricultural tax, penalties and fines.

After the audit, the entrepreneur sent the adjusted statements, hoping that the tax authority would establish the actual amount of obligations on it. Not receiving a positive decision, the entrepreneur applied to the court.

Three instances took the side of the tax authority. It was noted that the amended reporting does not exempt from liability. The Supreme Court considered the arguments of the entrepreneur noteworthy and submitted the payer's complaint to another court.

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