Pepeliaev Group's lawyers have won a tax dispute in the Russian Supreme Court

Lawyers from Pepeliaev Group’s tax practice successfully defended the interests of a credit institution in a dispute with the tax authority. State commercial courts of three levels had upheld the lawfulness of the decision of the tax authority to additionally assess profit tax in connection with payroll costs being excluded from expenses when employees had been dismissed by agreement of the parties. The bank’s appeal to the Supreme Court was subsequently referred to the Judicial Board for Economic Disputes. 

It is noteworthy that this is already the seventh case on a similar issue that has been referred to the Board since September 2016. However, despite the well-established consistent legal position of the Judicial Board for Economic Disputes of the Russian Supreme Court, state commercial courts continue to dismiss taxpayers’ claims. This was the case with Pepeliaev Group’s client. The court of cassation refused to recognise the bank’s claims as justified although the Judicial Board for Economic Disputes of the Russian Supreme Court had already issued four rulings in favour of taxpayers by that time. 

Having considered the bank’s appeal, the Judicial Board for Economic Disputes of the Russian Supreme Court quashed all the judgments and, without referring the case for a new trial, sustained all the bank’s claim in full. This is a rarity in the context of similar disputes (the Board usually refers such cases for a new trial). 

The matter was handled by Anton Nikiforov, a Partner at Pepeliaev Group, and Anastasia Zhigina, a Senior Associate with the firm.