The Risk-Free Corporate Tax Management Conference organised by Nalogoved journal with expert legal support from law firm Pepeliaev Group has been held in Moscow.
On 5 October, the Risk-Free Corporate Tax Management Conference organised by Nalogoved with expert legal support from Pepeliaev Group was held in Moscow.
The tax system is constantly evolving: tax administration is being improved, while the Tax Code is being amended and supplemented in material ways. For sustainable business development it is important to ensure that companies benefit from tax security. During the Risk-Free Corporate Tax Management Conference, recognised experts in tax law spoke about how this can be achieved.
The first session was dedicated to tax planning. Natalia Faizrakhmanova, Senior Associate at Pepeliaev Group talked about the Law on tax abuses (the new article 54.1 of the Russian Tax Code) Natalia touched upon the subject of whether the new law is a codification of existing judicial doctrines or whether it creates new rules. Andrey Nikiforov, Partner at Pepeliaev Group, looked into the application of the term ‘unjustified tax benefit’ and tried to answer what the ‘actual economic substance of a transaction’ means. Ksenia Litvinova, Head of Pepeliaev Group's Tax Practice group talked about how the justification of tax benefits relates to the reasonableness of a company’s operations as assessed by the tax authorities. Providing examples of court decisions in which the courts' conclusions are ambiguous, Ksenia noted that the danger of conclusions drawn from specific cases is that the tax authorities may extrapolate them and apply them to completely different situations.
The second session was dedicated to the practical aspects of recovering bad debt. It was opened by Petr Popov, Senior Associate at Pepeliaev Group, who talked about managing tax risks when transferring or receiving property to repay debts. Petr noted that for this kind of transaction it is necessary to prove that the taxpayer actually effected it and there was a business purpose behind such transaction. Pepeliaev Group's Managing Partner and Editor-in-Chief of Nalogoved Sergey Pepeliaev drew the attention of the audience to the tax risks brought about by the changes made to bankruptcy legislation. As Mr Pepeliaev stated, the Russian Federal Tax Service today is the most aggressive creditor in bankruptcy cases. What makes tax authorities act that way? To provide the answer to this question, statistical data was presented on the additional assessment of taxes and actual recovery of debt. Konstantin Sasov, Senior Associate at Pepeliaev Group, provided his assessment of whether it is constitutional to recover a company's tax arrears from individuals. According to Konstantin it is wrong to extend provisions of civil legislation to criminal proceedings when recovering tax arrears from individuals.
The third session was dedicated to tax administration. The session started with a discussion of the statistics of consideration of tax disputes in different districts led by Sergey Savseris, Senior Partner at Pepeliaev Group. Sergey urged participants not to allow any violations or abuse from tax authorities even at the stage of the tax audit. Leonid Kravchinsky, Partner at Pepeliaev Group, gave a reminder about the introduction of criminal liability for the evasion of insurance contributions. He also noted that a practice has been developing of imposing criminal liability under clause 187 of the Russian Tax Code (‘Illegal turnover of payments’) which now includes ‘an order to transfer funds’. Olga Vaganova, Head of Tax at Severstal, and Ekaterina Semkina, Senior Associate at Pepeliaev Group spoke about how to avoid conflicts with tax authorities. Olga shared the experience Severstal had in the company's dealings with tax authorities and spoke of how the formation of a consolidated group of taxpayers had a positive effect on the entire process. She also talked about new business challenges, noting that the company is aiming to reduce the human factor in its interactions with tax authorities. Ekaterina Semkina picked up the baton from Olga and noted that although the issue is indeed significant, the matter of interaction between tax authorities and taxpayers in the Tax Code is only brought up in the section on the tax monitoring. She also cited the principles that are fixed in the Code (namely lawfulness, transparency, and mutual respect) as those on which such interaction should be based.
The closing session was dedicated to cross-border transactions. Irina Miroshnichenko, Head of Tax at Gazprom Export , shared her experience of preparing the reports on controlled foreign companies and noted that when they first applied the respective provisions of the Tax Code they came across a large number of ambiguities which were subsequently recognised by the Russian Ministry of Finance. Andrey Kirillov, Senior Associate at Pepeliaev Group, talked about applying of the ‘look through’ approach and tax residency as planning tools and dwelt on the possible risks involved. Andrey Tereschenko, Partner at Pepeliaev Group, presented the new and, for the time being, the only practice of the application of double-tax treaties to passive income received from Russia. Dmitry Volvach, Head of the Department for standards and international cooperation of the Russian Federal Tax Service, took an active part in the session. He spoke about the work that is being done by the Russian and foreign tax authorities to set up the information exchange system. Dmitry placed special emphasis on the fact that more and more governments are now ready to join the international system for exchanging information about taxpayers. Andrey Nikonov, Senior Partner at Pepeliaev Group, provided a detailed outlook on what BEPS means for the Russian offices of international corporations and mentioned that it should be applied to both a taxpayer's and a tax authority's actions. In conclusion he outlined several ways of protection against BEPS-based claims raised by tax authorities.
A detailed report about the Risk-Free Corporate Tax Management Conference can be found in Nalogoved. http://nalogoved.ru/news/4052
