The Working Group is headed up by Leonid Kravchinsky, a Partner at Pepeliaev Group, with meetings moderated by Alena Kanygina, a Senior Associate at the firm.
Welcoming remarks were delivered by Dmitry Fadeev, Deputy Chair of the CCI’s Expert Council for Improving Tax Legislation and Law Enforcement Practice, and Leonid Kravchinsky, Head of the Working Group.
Within the agenda of the meeting, experts from Pepeliaev Group made presentations.
Egor Lysenko, Head of the Siberian Office, spoke the topic “Transformation of Tax Control: from a Reactive Model to Predictive Analytics (Taxpayer Ratings and Registers)”.
“The transformation of tax control is happening on a large scale and is irreversible. New tools are creating both opportunities and risks, while legal regulation significantly lags behind technological change. In such circumstances, the proactive management of tax risks becomes critically important.”
The participants discussed the fact that the technologies being applied by the tax authorities directly affect taxpayers, while mechanisms for influencing rating indicators are either lacking altogether or are unclear. This requires further refinement and solutions.
Sergey Savseris, Senior Partner, discussed the topic of “The Narrowing by the Russian Ministry of Finance of the Right to Use Federal Investment Deductions (FIDs)”. He examined the Ministry’s position of denying taxpayers the right to apply FIDs where Special Investment Contracts (SPICs) are in place within a group.
“There is no legal basis for such a restrictive interpretation, which results in taxpayers being deprived of the opportunity to exercise their legitimate rights.”
The issue is both pressing and far-reaching. Those taking part in the meeting noted that similar approaches to FIDs could be extended to users of Regional Investment Deductions, the number of which is considerably larger and covers a wide range of market participants.
Ekaterina Martemyanova, Senior Associate, raised the problem that there are no control measures against certain individuals who have committed tax violations. She drew attention to cases where tax assessments have been imposed on parties who were not the benefiting from tax schemes, when it was possible in practical terms to administer the actual offenders, yet no such control was carried out.
“We are faced with tax claims against good-faith taxpayers because the party that committed a tax offence has been incorrectly identified, because attention is not paid to the negative characteristics of counterparties, and because the conclusions are used of reports of third-party audits. And here we do not mean shell companies, but operating business entities.”
The participants also discussed other examples of such flaws in control that have been flagged as arising in practice. Once again, following the previous meeting of the Working Group, they emphasised that it is important to establish control measures involving all parties involved in transaction chains, which would help to safeguard good-faith purchasers from tax claims.
In conclusion, the meeting underlined the need to develop approaches that would resolve the identified issues or mitigate their adverse impact, as well as adapt law enforcement practice to the new technological realities, and ensure that taxpayers’ rights are protected.
