The case of VimpelCom PJSC has won in the “Administrative Dispute of the Year” category in Legal Insight's The CASE research

The court dispute of VimpelCom PJSC vs The Russian Federal Tax Service has been acclaimed as the case of 2024 in the “Administrative Dispute of the Year” category in Legal Insight's The CASE research. In the case, VimpelCom PJSC was represented by a team from Pepeliaev Group that included partner Rustem Ahmetshin and senior associate Alexander Kuznetsov.

We remind you that the company was challenging a decision of the Federal Tax Service to schedule a transfer pricing audit, since the deadline for an audit to be held had been missed. State commercial courts of all levels did not agree with our client, so the company then applied to the Russian Constitutional Court. Here, it was held that the provision of the Russian Tax Code at issue in the case contradicted the Russian Constitution, so the case was ordered to be considered anew (see Resolution No. 41-P dated 14 July 2023).

“The dispute was complicated," comments Rustem Ahmetshin. "Neither state commercial courts nor the Supreme Court upheld our position, and we ended up in the Constitutional Court. In July 2023, the Constitutional Court handed down a resolution stating that the provision of the Tax Code that the Federal Tax Service had used as a basis for scheduling the tax audit was unconstitutional, so the case of VimpelCom PJSC was to be reconsidered. Yet, that turned out not to be enough. During 2024, we had to go through three levels in state commercial courts to have the audit that had been scheduled declared invalid.”

Here is the comment by Nikolay Shmakov, head of tax administration department of VimpelCom PJSC: “This victory not only allowed the company to safeguard its rights but also led to the unconstitutional provisions of the Tax Code being amended, establishing clarity in terms of the timeframes for transfer pricing audits to be carried out,” states Nikolay Shmakov, head of the tax administration department at VimpelCom PJSC.

“The case is of great significance for the market as it has clarified the procedure for tax control to be exercised over transfer pricing," remarks Ekaterina Makeeva, expert of The CASE research by Legal Insight and deputy editor-in-chief of Legal Insight journal. Moreover, to safeguard its position that tax control cannot be exercised for an unlimited period, the company had to go all the way to the Russian Constitutional Court.”