Currently, for the purposes of tax planning, a taxpayer has the right to resort to the use of those methods and means of tax planning that are not prohibited by law. The state, guided primarily by fiscal interests, as well as the judiciary, guided by the interests of justice, limit the scope of tax minimization using various methods. The classification of which is given in the table.

Table number 3.

Tax planning limitations
Legislative restrictions	Administrative impact	Special Judicial Doctrines
Legally defined procedures for controlling and counteracting undesirable, from the point of view of the state, activities of the taxpayer.	Legislatively defined powers of state bodies to compel economic entities to refuse to use dubious methods of tax minimization, implemented, as a rule, by holding them accountable.	Worked out judicial practice approaches to determining the objective intentions of the parties in the implementation of transactions or the implementation of financial business transactions.
For example: − state registration; − tax registration; − use of cash registers; − product certification; − accounting and tax accounting; − “punitive” taxes; − "prohibitive" customs duties; − other legal requirements.	For example: − collection of arrears; − fines; − joint and several fulfillment of the obligation to pay tax by legal successors in the course of reorganization; − control by the state and mechanisms of intervention in the activities of the taxpayer in transfer pricing; − special rules of law aimed at suppressing offshore schemes.	For example: − the doctrine of "Being over form"; − doctrine "Business Purpose"; − Doctrine "Transactions by stages"; − the doctrine of "Bad faith of the taxpayer"; - the doctrine of "Abuse of the right"; − doctrine “Unjustified tax benefit”; − doctrine "Abnormal acts of management" − doctrine “Economically justified expenses”.

4.1. Legislative restrictions

Legislative restrictions - these are legally defined procedures for monitoring the financial and economic activities of the taxpayer in order to prevent the use of illegal or undesirable, from the point of view of the state, methods and methods.

For example, legislative restrictions provide for the obligation of the subject to undergo state registration, provide documents necessary for the calculation and payment of tax, etc. Such restrictions include the established measures of responsibility for violations of tax laws.

Subjects economic activity The following statutory restrictions must be observed and complied with:

1) state registration , the procedure for which is regulated by the Federal Law of August 8, 2001 N 129-FZ "On State Registration of Legal Entities and Individual Entrepreneurs". At present, the authorized body carrying out state registration legal entities and individual entrepreneurs, is the Federal Tax Service of Russia. If entrepreneurial activity is carried out without state registration, then this entails bringing the person engaged in entrepreneurial activity to two types of liability:

− Imposition of an administrative fine in the amount of 500 to 2000 rubles (Article 14.1 of the Code of Administrative Offenses of the Russian Federation);

- bringing to criminal responsibility in the form of a fine, compulsory work, arrest or imprisonment for up to five years (Article 171 of the Criminal Code of the Russian Federation);

2) tax registration. Taxpayers must register with the tax authorities at the location of the organization, the location of its separate subdivisions, the place of residence of an individual, as well as at the location of their immovable property and vehicles subject to taxation. Tax registration of organizations and individual entrepreneurs according to their location (residence) is carried out tax authorities on the basis of information contained in the relevant state registers (Unified State Register of Legal Entities and Unified State Register of Individual Entrepreneurs). Registration of an organization at the location of its separate subdivision is carried out on the basis of a special application. The tax authority is obliged to register the organization at the location of the separate subdivision within five days from the date of submission of all necessary documents. Articles 116 and 117 of the Tax Code of the Russian Federation provide for sanctions, respectively, for violation by a taxpayer of the established deadline for filing an application for tax registration and for conducting activities by an organization or an individual entrepreneur without registration with a tax authority;

3) the use of cash registers (machines). If an economic entity makes payments for goods, works and services in cash Money or payment cards (both with the population and with organizations), he will have to use the specified technique. This regulation and its features are regulated federal law dated 22.05.2003 N 54-FZ "On the use of cash registers in the implementation of cash settlements and (or) settlements using payment cards". Measures of administrative responsibility in the form of a fine are applied to violators of the law: on officials - from 30 to 40 minimum wages; for legal entities - from 300 to 400 minimum wages (Article 14.4 of the Code of Administrative Offenses of the Russian Federation);

4) certification of goods (works, services). Many manufactured and sold goods, works and services are subject to mandatory certification, in accordance with the Federal Law of December 27, 2002 No. 184-FZ “On Technical Regulation”. Confirmation of conformity may be voluntary or mandatory. A business entity should pay special attention, since violation of the rules of mandatory certification entails the imposition of an administrative fine: for officials - from 10 to 20 minimum wages with confiscation of objects of an administrative offense; for legal entities - from 200 to 300 minimum wages with confiscation of objects of an administrative offense (Article 19.19 of the Code of Administrative Offenses of the Russian Federation);

5) accounting and tax accounting. Order of conduct accounting regulated by the Federal Law of November 21, 1996 No. 129-FZ “On Accounting” and the Regulations on Accounting and financial statements in RF. Heads of organizations and other persons responsible for the organization and maintenance of accounting, in case of evasion from accounting in the manner prescribed by the legislation of the Russian Federation and regulations of the bodies regulating accounting, distortion of financial statements and non-compliance with the deadlines for its submission and publication, are subject to administrative or criminal liability in accordance with the legislation of the Russian Federation.

6) other requirements of the legislation of the Russian Federation.

It is also possible to refer to the legislative restrictions successfully applied in a number of countries special punitive taxes(penalty tax), which apply to taxpayers in special cases. Penalty taxes include:

A tax for the unreasonable accumulation of corporate profits. It is used in cases where a corporation evades the distribution of dividends, uses the funds of dividends for purposes recognized as unreasonable, namely: for the subsequent provision of loans to shareholders of the corporation; to enable shareholders to use corporation funds for personal purposes; for investment in securities if this activity is non-traditional for the enterprise;

Tax on personal holding companies. Applied to limit the use of corporations as so-called checkbooks, i.e. corporations established With for the purpose of trading in securities for its founders or as “incorporated talent”, i.e. corporations established to manage the funds of its owner (artists, athletes, etc.).

"On Amendments to Part One of the Tax Code of the Russian Federation"

A comment

The provisions of the Tax Code of the Russian Federation allow payers to reduce the amount of taxes (tax base) and contributions. For example, when calculating VAT or personal income tax, deductions can be applied, and when calculating income tax, expenses can be taken into account. The legislator has tightened the rules for such a reduction.

When it is not possible to reduce the tax (contribution)

The law introduced a new rule: the payer cannot reduce the tax base or the amount of the tax (contribution) if he distorted information about the facts of economic life, about the objects of taxation, which are reflected in tax or accounting or reporting. The fact of economic life is understood as a transaction, event, operation that has or is able to have an impact on the financial position of the taxpayer (clause 8, article 3 of the Federal Law of December 6, 2011 No. 402-FZ "On Accounting").

Thus, at the legislative level, the approach that has previously developed in judicial practice is fixed: if transactions are not accounted for in accordance with their actual economic meaning, then the tax benefit received in connection with this is unreasonable and is denied receipt (clause 7 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated 10/12/2006 No. 53 "On the assessment by arbitration courts of the validity of obtaining a tax benefit by a taxpayer").

It should be noted that the new norms do not explain what should be understood as the distortion of information about the facts of economic life (about the object of taxation). It is obvious that under the distortion of facts is understood the inconsistency of the accounting data with reality. In this regard, we believe that in practice there will still be disputes about establishing this reality.

It is not entirely clear whether the misrepresentation includes unintentional counting errors. If we follow the literal interpretation of the new norm, then tax deduction(recognition of expenses) is not possible if such an error is made in the declaration. However, the provisions of Art. 81 of the Tax Code of the Russian Federation allow you to correct given error by submitting an amended declaration. In this regard, another question arises: is it possible to reduce the tax in this case?

Conditions for tax reduction

If the payer has not distorted information about the facts of economic life (about the object of taxation), he may apply for a reduction in tax, subject to the following conditions:

• the main purpose of the transaction (operation) was not non-payment or offset (refund) of tax. In other words, a tax cut will be denied if it was the main goal and there was no real economic activity. This approach is also shared by judicial practice (clause 9 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of October 12, 2006 No. 53);
• the payer's counterparty has fulfilled its obligations under the transaction (operation).

The last point raises a number of questions.

First. It is not specified at what point the obligations of the counterparty to the payer must be fulfilled: at the time of the tax reduction application in the declaration or at the time of the tax audit of the payer's activities. We believe that it is safer not to declare a tax reduction until the partner fulfills its obligations.

Second. Does the restriction apply to those obligations that will not be fulfilled by the counterparty at all? For example, is it still possible to write off bad debts under Art. 266 of the Tax Code of the Russian Federation or it will be illegal, since the conditions for reducing tax base not followed?

Third. Currently, the Tax Code of the Russian Federation does not make the reduction of the tax (contribution) dependent on the fulfillment by the counterparty of its obligations. For example, the deduction of advance VAT from the buyer is possible after the transfer of the prepayment (see) without shipment of the goods, i.e. until the seller fulfills his obligations. However, the new rules prohibit such a deduction.

In the light of the new rules, it is not entirely clear whether the special provisions of the RF Tax Code on reducing tax until the counterparty fulfills obligations (on the deduction of advance VAT from the buyer, on accounting for bad debts in expenses, etc.) will be applied in practice. In such a situation, it remains to wait for clarifications from the regulatory authorities and judicial practice.

What does not affect the possibility of reducing the tax (contribution)

The new law also has positive aspects for the taxpayer. So, the grounds on which the tax authorities cannot refuse to reduce the tax (contribution) are given:

• signing of primary accounting documents by an unidentified or unauthorized person;
• violation by the counterparty of the legislation on taxes and fees;
• the taxpayer has the opportunity to obtain the same economic result when making other legal transactions (operations).

This is possible provided that the taxpayer does not distort information about the facts of economic life (see about this).

Previously, courts have taken the same view. They did not recognize the tax benefit as unreasonable on these grounds, rejecting the nit-picking of the tax authorities (clause 4,, 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of October 12, 2006 No. 53).

The main reason for the insufficient receipt of taxes in the budget is the deliberate evasion of their payment through various schemes, including the use of "one-day" firms. Until recently, in litigation for "unjustified tax benefit", the parties were guided by the provisions of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53. With inclusion from 19.08.2017 in tax code Art. 54.1 "Limits for exercising the rights to calculate the tax base and (or) the amount of tax, dues, insurance premiums" new concepts replaced the old ones. Law enforcement practice has also undergone changes. Read more about how the emphasis has shifted in resolving disputes over aggressive tax optimization.

Let us recall the pre-existing rules, according to which for more than ten years disputes over intentional tax actions. According to the clarifications given in clause 10 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53, the fact that a taxpayer’s counterparty violates its tax obligations is not in itself proof that the taxpayer has received unjustified tax benefit. A tax benefit may be recognized as unreasonable if the tax authority proves that it acted without due diligence and care and he should have been aware of the violations committed by the counterparty, in particular, due to the relationship of interdependence or affiliation of the taxpayer with the counterparty.

The tax benefit may also be recognized as unjustified if the tax authority proves that the activities of the taxpayer, his interdependent or affiliated of persons is aimed at making transactions related to tax benefits, mainly with counterparties that do not fulfill their tax obligations.

Federal Law No. 163-FZ of July 18, 2017 (hereinafter referred to as Law No. 163-FZ) supplemented the Tax Code with Art. 54.1 "Limits for exercising the rights to calculate the tax base and (or) the amount of tax, dues, insurance premiums." The newly introduced article does not provide for such evaluative concepts as "failure to exercise due diligence", "unreasonable", - they were replaced by "minimization of tax liabilities as a result of deliberate misrepresentation of information" and "limits to the exercise of tax rights".

According to the author, it is unlikely that there will be a complete rejection of previously applied acts, since it was on the basis of the Decree of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53 that Art. 54.1 of the Tax Code of the Russian Federation. But the significance of documents issued before the entry into force of Law No. 163-FZ is declining, which is confirmed by the materials of the trials. Of course, arbitration practice on the application of Art. 54.1 of the Tax Code of the Russian Federation is still scarce and cannot boast of uniformity, but the fact that it arose in such a short period, and the tone it has already set, inspires optimism.

On the timing and duration of Art. 54.1 of the Tax Code of the Russian Federation

According to paragraph 1 of Art. 2 of Law No. 163-FZ, the norms of Art. 54.1 of the Tax Code of the Russian Federation came into force on August 19, 2017. At the same time, paragraph 2 of Art. 2 of Law No. 163-FZ provides that the provisions of paragraph 5 of Art. 82 of the Tax Code of the Russian Federation apply to cameral tax audits tax returns(calculations) submitted to the tax authority after the date of entry into force of the above law, as well as on-site tax audits and checks of the completeness of the calculation and payment of taxes in connection with the transactions between related parties, decisions on the appointment of which were made by the tax authorities after the date of entry into force of the law (that is, from 08/19/2017).

Note. Paragraph 5 of Art. 82 of the Tax Code of the Russian Federation (introduced by Law No. 163-FZ) stipulates the procedure for proving the circumstances provided for in paragraph 1 of Art. 54.1 of the Tax Code of the Russian Federation, and (or) the fact of non-compliance with the conditions named in paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation, when the tax authority takes measures tax control.

Opinions of the arbitrators on the legitimacy of giving retroactive effect to the provisions of Art. 54.1 of the Tax Code of the Russian Federation were divided. Some courts do not recognize this as possible, as evidenced by the rulings:

- of the Third Arbitration Court of Appeal dated October 05, 2017 in case No. A33-2737 / 2017, dated September 19, 2017 in case No. A33-3917 / 2017;

- of the Ninth Arbitration Court of Appeal of October 17, 2017 No. 09AP-48550/2017 in case No. A40-76346/17;

- of the Fourteenth Arbitration Court of Appeal dated October 18, 2017 in case No. A66-4713 / 2017;

- The Twenty-First Arbitration Court of Appeal dated November 1, 2017 in case No. A83-5728/2017 (the court considered the appeal of the Federal Tax Service Inspectorate for the city of Simferopol against the Decision of the Arbitration Court of the Republic of Crimea dated July 14, 2017 in case No. A83-5728/2017).

Other courts are convinced that there are grounds based on Part 2 of Art. 54 of the Constitution of the Russian Federation and paragraph 3 of Art. 5 of the Tax Code of the Russian Federation to give retroactive effect to the norms of Art. 54.1 of the Tax Code of the Russian Federation. The following are examples of this:

- The Fourth Arbitration Court of Appeal dated October 12, 2017 No. 04AP-5202/2017 in case No. A19-19466/2016;

- the Seventh Arbitration Court of Appeal dated September 20, 2017 No. 07AP-7376/2017 in case No. A45-4180/2017;

- of the Thirteenth Arbitration Court of Appeal dated September 13, 2017 No. 13AP-14558/2017 in case No. A56-28927/2016;

- of the Sixteenth Arbitration Court of Appeal dated October 17, 2017 No. 16AP-815/2017 in case No. A63-232/2017;

- of the Seventeenth Arbitration Court of Appeal dated October 23, 2017 No. 17AP-8375 / 2017-AK in case No. A50-7683 / 2017, etc.

The Federal Tax Service responded to the change in arbitration practice by issuing Letter No. ED-4-9/22123@ dated October 31, 2017, in which it indicated that the qualification of the circumstances identified during the audit should be carried out taking into account the specific paragraph of Art. 54.1 of the Tax Code of the Russian Federation.

Intentional distortion of the facts of economic life

By virtue of paragraph 1 of Art. 54.1 of the Tax Code of the Russian Federation, it is not allowed for a taxpayer to reduce the tax base and (or) the amount of tax payable as a result of distorting information about the facts of economic life (the totality of such facts), about objects of taxation subject to reflection in the tax and (or) accounting or tax reporting of the taxpayer.

This norm actually defines the conditions that prevent the creation of tax schemes aimed at illegally reducing tax liabilities, including by not taking into account objects of taxation, illegally declared benefits, etc. In order to comply with the principle of uniformity during tax audits, the Federal Tax Service brought to the lower authorities a Letter dated 08/16/2017 No. SA-4-7/16152@. This letter instructs the tax authorities, when proving the facts of non-fulfillment (incomplete fulfillment) of the obligation to pay taxes or unreasonable receipt of the right to their reimbursement (refund, offset), to ensure that evidence is obtained that indicates deliberate participation of the audited taxpayer, secured, among other things, by the actions of its officials and participants (founders), in purposeful creation of conditions aimed solely at obtaining tax benefits.

The established facts of legal, economic and other accountability, including on the basis of interdependence, disputable counterparties to the audited taxpayer, established facts of transit operations between interdependent or affiliated participants in interrelated business transactions, including through intermediaries, using special forms of payment and payment terms, as well as circumstances indicating the consistency of actions of participants in economic activities, etc. If it is proven that the taxpayer's actions aimed at non-payment of tax were intentional, the tax liabilities arising as a result of such actions are corrected in full.

In the Resolution of the Thirteenth Arbitration Court of Appeal in case No. A56-28927 / 2016, the judge, with reference to paragraph 1 of Art. 54.1 of the Tax Code of the Russian Federation canceled the decision of the tax authority and the lower court, indicating that the tax authorities did not provide the necessary evidence, namely, the consistency of the actions of taxpayers aimed at making a transaction with the aim of non-payment (incomplete payment) and (or) offset (refund) of the amount of tax, evidence of control counterparties, other facts of imitation of economic relations and (or) evidence of affiliation of the parties to the transaction.

However, the main meaning of paragraph 1 of Art. 54.1 of the Tax Code of the Russian Federation is, nevertheless, in the inadmissibility of intentional tax evasion, which is reflected in the decisions of the Seventeenth Arbitration Court of Appeal dated October 19, 2017 No. 17AP-14029 / 2017-AK in case No. A60-18957 / 2017, No. 17AP-11528 / 2017-AK in case No. A50-24227 / 2016, dated 08.31.2017 No. 17AP-10225 / 2017-AK in case No. A50-4720 / 2017 (the session of the cassation instance was scheduled for 11.28. F09-6792/17 in case No. А50-4720/2017)).

The purpose of the transaction

In addition to indications of the inadmissibility of minimizing tax liabilities by a taxpayer as a result of deliberate misrepresentation of data, paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation defines one more circumstance, with which it connects the need to refuse to grant the taxpayer the right to in determining taxable profit and to apply for the deduction (offset) of VAT amounts.

In the absence of the circumstances provided for in paragraph 1 of Art. 54.1 of the Tax Code of the Russian Federation, for transactions (operations) that have taken place, the taxpayer has the right to reduce the tax base and (or) the amount of tax payable, subject to the following conditions:

the main purpose of the transaction (operation) is not non-payment (incomplete payment) and (or) offset (refund) of the amount of tax;

the obligation under a transaction (operation) has been fulfilled by a person who is a party to an agreement concluded with a taxpayer and (or) by a person to whom the obligation to execute a transaction (operation) has been transferred under an agreement or law.

Explaining the application of this provision by the tax authorities in Letter No. SA-4-7/16152@, the Federal Tax Service indicated that failure to meet at least one of the specified criteria entails consequences for the taxpayer in the form of refusal to record such transactions (operations) for tax purposes. In connection with the foregoing, in the course of tax control measures, special attention is prescribed to be paid to the study of circumstances confirming or refuting the actual execution of a transaction (operations) by a counterparty.

When establishing by the tax authorities the presence, within the framework of transactions (operations) concluded by the taxpayer, of at least one of the two circumstances specified in paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation, he should be denied the right to record the expenses incurred, as well as applications for them for the deduction (offset) of VAT in full.

The provisions of paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation do not provide for negative consequences for taxpayers for illegal actions of counterparties of the second, third and subsequent links. Thus, tax claims are possible only if the tax authority proves the fact of the unrealistic execution of the transaction (operation) by the counterparty of the taxpayer (the first link) and the taxpayer does not comply with the established paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation of conditions (decisions of the Seventh Arbitration Court of Appeal dated September 20, 2017 No. 07AP-7376 / 2017 in case No. A45-4180 / 2017, of the Sixteenth Arbitration Court of Appeal dated October 17, 2017 No. 16AP-815 / 2017 in case No. A63-232 / 2017).

For your information: Let us recall that prior to the entry into force of the amendments to the Tax Code, the tax authorities cited non-fulfillment of tax obligations not only by counterparties of the first link, but also by the second and subsequent links as an evidence base. The formation of this practice was facilitated by the risk management system "SUR ASK VAT", which allows identify illegal tax optimization chains regardless of the number of links in the chain.

Courts when applying paragraphs 2 and 3 of Art. 54.1 of the Tax Code of the Russian Federation emphasize that these paragraphs improve the position of taxpayers, since they establish additional guarantees for the protection of their rights (Decree of the Fourth Arbitration Court of Appeal dated 12.10.2017 No. 04AP-5202 / 2017 in case No. A19-19466 / 2016). However, this does not mean an automatic indulgence for "malicious" offenders. Thus, the fact of unjustified reduction of taxes on the basis of paragraphs. 1 p. 2 art. 54.1 of the Tax Code of the Russian Federation were established by the judges in the decisions of the First Arbitration Court of Appeal dated October 2, 2017 in case No. A43-2421 / 2017, the Seventeenth Arbitration Court of Appeal dated October 19, 2017 No. 17AP-13756 / 2017-AK in case No. A50-13410 / 2017.

Formal signs of a tax violation

Paragraph 3 of Art. 54.1 of the Tax Code of the Russian Federation, it is determined that the signing of primary accounting documents by an unidentified or unauthorized person, violation by the taxpayer's counterparty of the legislation on taxes and fees, the possibility of the taxpayer obtaining the same result economic activity when making other transactions (operations) not prohibited by law, they cannot be considered as an independent basis for recognizing the reduction by the taxpayer of the tax base and (or) the amount of tax payable as unlawful.

This paragraph actually consolidates the position reflected in the previously adopted resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation of April 20, 2010 No. 18162/09, of May 25, 2010 No. 15658/09, of June 8, 2010 No. the fact that this transaction and the documents confirming its execution, on behalf of the counterparty of the company, are signed by a person who denies their signing and that he has the powers of the head, in itself is not unconditional and sufficient evidence indicating that the company has received an unreasonable tax benefit.

According to the Federal Tax Service, the legislator, paragraph 3 of Art. 54.1 of the Tax Code of the Russian Federation requires the exclusion from the practice of the tax authorities of a formal approach in identifying the circumstances of understatement of the tax base or tax evasion. The courts did not fail to take advantage of this. In particular, the arbitrators with reference to paragraph 3 of Art. 54.1 The Tax Code of the Russian Federation did not recognize as an independent basis the signing of primary accounting documents by an unauthorized person (Decree of the Fourth Arbitration Court of Appeal dated October 12, 2017 No. 04AP-5202/2017 in case No. A19-19466/2016), violation of tax obligations by counterparties (Decree of the Ninth Arbitration Appeal court dated October 16, 2017 No. 09AP-39100/2017 in case No. A40-64246/17). Similar conclusions are contained in the resolutions:

- of the Twelfth Arbitration Court of Appeal dated September 28, 2017 No. 12AP-10540/2017 in case No. A12-10631/2017;

- of the Thirteenth Arbitration Court of Appeal dated September 13, 2017 No. 13AP-14558 / 2017 in case No. A56-28927 / 2016 (AS SZO cassation appeal accepted for proceedings. The next meeting is scheduled for December 07, 2017);

- of the Seventeenth Arbitration Court of Appeal dated October 20, 2017 No. 17AP-13676 / 2017-AK in case No. A60-25288 / 2017, No. 17AP-10502 / 2017-AK in case No. A50-15977 / 2017.

So, with the adoption of Law No. 163-FZ, a ban on tax abuses was introduced into the legislation for the first time. The innovation is presented by Art. 54.1 of the Tax Code of the Russian Federation, which establishes the limits for exercising the rights to calculate the tax base and (or) the amount of tax, fee, insurance premiums. According to this article, the taxpayer must be conscientious and not allow any distortion of information about the facts of economic activity displayed in tax and (or) accounting, as well as tax reporting. In addition, he must simultaneously comply with the following conditions:

the main purpose of the transaction should not be non-payment (incomplete payment) and (or) offset (refund) of the amount of tax;

the obligation under a transaction (operation) must be performed by a person who is a party to an agreement concluded with a taxpayer and (or) by a person to whom the obligation to execute a transaction (operation) has been transferred under an agreement or law.

If all the above conditions are met, the taxpayer can count on a reduction in the tax base or the amount of tax payable.

When deciding on the validity of the tax benefit in relations with counterparties that do not have the necessary conditions for economic activity, the actual (real) performance of those business transactions that entailed the costs of the taxpayer is of decisive importance. See the decisions of the Seventeenth Arbitration Court of Appeal dated October 16, 2017 No. 17AP-13437/2017-AK in case No. А50-11175/2017, dated October 13, 2017 No. 17AP-13671/2017-AK in case No. А50-11339/2017, dated 10/04/2017 No. 17AP-11593/2017-AK in case No. А50-10371/2017.

One of the most important innovations in the tax legislation of 2017 is Article 54.1 of the Tax Code of the Russian Federation. It is addressed to both tax authorities and payers. The Federal Tax Service of Russia explained how to apply its provisions aimed at suppressing illegal tax schemes and proving them. About this - in our material.

The limits for calculating the base for taxes and contributions are stipulated

Federal Law No. 163-FZ of July 18, 2017 added Article 54.1 of the Tax Code of the Russian Federation to the Tax Code of the Russian Federation on August 19, 2017. Changes of this kind can be considered truly revolutionary and long-awaited (hereinafter - Law No. 163-FZ).

The official name of the new article 54.1 of the Tax Code of the Russian Federation is “Limits for exercising the rights to calculate the tax base and (or) the amount of tax, fee, insurance premiums”.

The bottom line is that the article 54.1 of the Tax Code under consideration introduces the prevention of a decrease in the tax base and / or the amount of tax payable due to distortion of tax and / or accounting or tax reporting data:

1. On the facts of economic life (their totality).
2. About objects on taxes.

FTS comments

Regarding Article 54.1 of the Tax Code of the Russian Federation, the comments of officials are set out in the letter of the Tax Service of Russia dated August 16, 2017 No. SA-4-7 / 16152.

The tax authorities claim that Article 54.1 of the Tax Code of the Russian Federation since 2017 actually introduces criteria that counteract the implementation of tax schemes with the aim of illegally reducing tax liabilities. For example, through:

• non-accounting of objects of taxation;
• statements of improper benefits, etc.

Proof of intent

It is important that Article 54.1 of the Tax Code of the Russian Federation obliges tax authorities, when proving non-fulfillment / incomplete fulfillment of the obligation to transfer taxes or unreasonably obtaining the right to their reimbursement (refund, offset), to do this not just in words, but to ensure that appropriate evidence is obtained.

Namely: in the new Article 54.1 of the Tax Code, we are talking about evidence that speaks of the intent of the payer to participate in the creation of conditions that are aimed only at tax benefits. Naturally, this can be expressed in actions:

• its officials;
• members/founders.

According to the Federal Tax Service, such intent can be said:

• established facts of legal, economic and other accountability (including the interdependence of counterparties in relation to the payer);
• established facts of transit operations between interdependent or affiliated persons involved in interconnected transactions (including with the help of intermediaries, special forms of payment and payment terms);
• signs of coordination of actions of persons involved in economic activity, etc.

Conclusion of the Federal Tax Service: if the inspectors have proved the intent to avoid paying the tax, the tax liabilities from such actions of the payer will be adjusted in full.

This is the position of the Federal Tax Service regarding the inadmissibility of minimizing taxes by deliberately distorting data on financial and economic activities.

Limits of tax benefit

In addition, Article 54.1 appeared in the Tax Code in order to delineate the boundaries of a legitimate tax benefit. When is it still possible to refuse the right to account for income tax expenses and deduct/credit VAT?

Rules of paragraph 2 of Art. 54.1 of the Code defines the conditions under the SIMULTANEOUS (!) presence of which and the absence of the circumstances from paragraph 1 of this article, it is possible to reduce the tax base and / or the amount of tax payable for transactions / operations. Here they are:

1. The main purpose of the transaction is not non-payment / incomplete payment and (or) offset / refund of tax.
2. The obligation under the transaction is fulfilled by the party to the agreement with the taxpayer - the counterparty of the first tier - and / or those to whom it was transferred under the agreement or the law.

But what if the company meets only one of these criteria? From the letter of the Federal Tax Service dated August 16, 2017 No. SA-4-7 / 16152, it follows that the accounting of expenses and the deduction (offset) of VAT should still be denied in full.

Taking into account Article 54.1 of the Tax Code of the Russian Federation, the tax authorities will show particular interest in the actual execution of the transaction by the counterparty: whether this is confirmed or not. At the same time, they will not determine by calculation the rights and obligations of the payer, who has distorted the actual economic meaning of the financial and economic transaction.

There shouldn't be a formal approach

The Federal Tax Service states that clause 3 of Article 54.1 of the Tax Code of the Russian Federation establishes a ban on the until recently formal approach of inspectors to detect understatement of the tax base or tax evasion. Simply put, when there is no real evidence of a direct violation of the law or abuse of rights.

Thus, the considered Law No. 163-FZ does not contain a purely evaluative term “failure to exercise due diligence”. That is, formal claims against counterparties - violation of the tax law, signing of documents by an unknown person, etc. - in the absence of facts refuting the reality of the declared counterparty's transactions and operations, cannot be an independent basis for refusing to account for costs and deductions.

Rules of paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation do not provide for negative consequences for the illegal actions of counterparties of the 2nd, 3rd and other links.

The main conclusion of the Federal Tax Service is that tax claims are possible only when the inspectors have proved:

1. That the transaction was not executed by the counterparty.
2. Failure to comply with paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation.

It is known that the Federal Tax Service quarterly monitors compliance with Law No. 163-FZ in the form of reports from its territorial bodies.

Amendments to the Tax Code of the Russian Federation came into force, defining the limits of legal and illegal tax optimization. RBC analyzed how the new rules will affect taxpayers and whether businesses will have to rebuild their tax policy

Photo: Igor Zarembo / RIA Novosti

At the end of last week, amendments to the Tax Code (TC) came into force, supplementing it with a new article 54.1 “Limits for exercising the rights to calculate the tax base and (or) the amount of tax, dues, insurance premiums”, which establish limits for the rights of taxpayers to tax optimization. In essence, the amendments define what is considered a justified and unjustified tax benefit.

An unjustified tax benefit will be considered if it is obtained as a result of misrepresentation of information in the accounting or reporting of the taxpayer. If there is no misstatement, the receipt of the tax benefit is considered justified if both conditions are met simultaneously. First, the main purpose of the transaction is not non-payment (or refund) of tax. Second, the deal is real: the parties fulfill their obligations under it. This, lawmakers believe, will prevent taxpayers from using fly-by-night firms.

The amendments also enshrined in the Tax Code of the Russian Federation the rejection of the formal approach of the tax authorities to the identification of unreasonable tax benefits. If source documents signed by an unauthorized person, the counterparty is a violator of tax laws, or the same economic result could have been obtained in other transactions, now by itself should not tell the tax authorities about the illegality of the tax benefit.

The provisions of the law apply not only to taxes, but also to insurance premiums and fees, tax agents must also obey them. The tax authority can establish the validity of the tax benefit only during an audit; for on-site tax audits, the provisions of the law began to be adopted from August 19, for desk audits - from the third quarter of 2017.

Prior to the advent of the amendments, there were no clear rules that would clearly draw the line between legitimate optimization and tax evasion in the legislation. For the last ten years business disputes with the Federal tax service were considered by arbitration courts within the framework of the concept of unjustified tax benefit. The concept of unjustified tax benefit was introduced in judicial practice Supreme Arbitration Court (SAC) in 2006 (Resolution of the Plenum of the SAC dated October 12, 2006 No. 53 “On the assessment by arbitration courts of the unreasonableness of obtaining tax benefits”). Arbitration courts in each case examined the circumstances of the transaction and determined to what extent the actions of the companies corresponded to the formal criteria approved by the Supreme Arbitration Court of Russia.

In order to assess exactly how the new rules of the game will affect the relationship between tax authorities and taxpayers, the decisions of arbitration courts, and to what extent businesses will have to restructure their tax policy, RBC interviewed lawyers in the tax law. The overall assessment is rather with a minus sign, although experts still note certain advantages, for example, the rejection of a formal approach. Lawyers believe that the law can negatively affect business: the new norm gives more possibilities tax authorities to assess additional taxes and reduce the number of protection mechanisms for conscientious taxpayers. The Federal Tax Service has the opposite position.​

Down with formalism

An obvious plus of the amendments is that now the Tax Code of the Russian Federation clearly declares the rejection of a formal approach to identifying unreasonable tax benefits. “In fact, those cases are becoming a thing of the past when the tax authorities could, for example, refuse to refund tax to a taxpayer or refuse to recognize expenses just because a comma was missing in the invoice or a technical error was made. The law clearly proclaims the priority of the reality of the transaction over any errors, - said the deputy, one of the authors of the amendments, Andrei Makarov. “Now the taxpayer will not be responsible in cases where his counterparty has not paid taxes.”

Companies have faced the formal approach of the tax authorities so often that the Federal Tax Service even had to issue a letter to cool the ardor a little on the ground, says Mikhail Alexandrov, partner at the A2 Law Office. More than 90% of additional tax assessments based on the results of on-site tax audits were due to complaints about signatures on documents and doubts about the integrity of counterparties, explains Diana Maklozyan, head of the legal department at Heads Consulting. “The amounts of additional charges for field tax audits rarely amount to less than 15 million rubles. Almost every decision on visiting tax audit was disputed, and before the court decision was made, money was already debited from the company’s account, if there were not enough funds, accounts were blocked, and in fact the company’s activities were paralyzed, ”says Maklozyan.

Photo: Dmitry Feoktistov / TASS

The reality of the deal instead of "due diligence"

The fulfillment of obligations by the counterparty under the transaction as a confirmation of its reality instead of endless checks by the taxpayer of their counterparties both from among suppliers and from the ranks of buyers (namely, this was required before) should also, in theory, be a plus for taxpayers, experts interviewed by RBC believe.

Recently, the very fact of contractual relations with one-day firms (which the taxpayer may not be aware of) has often been considered by arbitration courts as indisputable evidence of unjustified tax benefits.

​“Trends in the approach of courts to cases of unjustified tax benefits have become significantly tougher since about 2015-2016 - at present, the vast majority of such cases are considered not in favor of taxpayers,” says Alexander Yerasov, head of the Goltsblat BLP tax dispute resolution group. This reversal in arbitration practice coincided with the abolition of the Supreme Arbitration Court of Russia. In August 2014, the Supreme Arbitration Court ceased its activities, and the collegium established at the same time began to operate. Supreme Court on economic disputes. Until 2015, the situation was better. If the company was able to prove that it had exercised due diligence (one of the criteria for the good faith of a taxpayer, approved by the plenum of the Supreme Arbitration Court of the Russian Federation) when choosing a counterparty, then the courts supported the taxpayer, provided that the transaction was actually completed.

Typical in this respect is the case of Metinvest Eurasia (copies judgments posted in the ATP "Consultant Plus"). She twice - in 2015 and in 2017 - challenged the decisions of the tax inspectorate on additional tax assessments. In both cases, the company was charged with receiving an unjustified tax benefit when concluding a contract with a carrier. Tax office considered the transport transportation paid by the company to be fictitious. The Arbitration Court of the Moscow District came to the opposite conclusions. For the first time, the court sided with Metinvest Eurasia, but already in 2017, it supported the tax inspectorate.

One more example. In 2014, the Neftekhim Experimental Plant, a company from Bashkiria (one of the largest taxpayers) managed to win in three instances a litigation with the Interregional Inspectorate of the Federal Tax Service about allegedly hidden taxes in the amount of more than 120 million rubles. The tax inspectorate then considered that the plant did not purchase chemical raw materials (as indicated in the reports), but used plain water in production. Arbitration courts then did not find any signs that the company from Bashkiria received unreasonable tax benefits. However, the Collegium of the Supreme Court for Economic Disputes annulled the decisions of the courts. The board substantiated its decision by the fact that the arbitration court did not investigate the very possibility of execution of the transaction by the plant's counterparty.

Now, according to the amendments, the execution of the transaction by the counterparty is sufficient to obtain a reasonable tax benefit. But lawyers point to several serious “buts”: the reality of the transaction as a result of its execution by the counterparty will still have to be proven. In their opinion, taxpayers will still not be able to get away from a detailed check of counterparties.

The Federal Tax Service may consider the benefit unreasonable if it is not proven that the counterparty has the equipment and personnel necessary to provide the service, Diana Maklozyan cites an example. Therefore, it is important to check the counterparty before concluding a deal, to make sure that he has the necessary resources to fulfill the terms of the contract.

Now the business must preventively form protective mechanisms, agrees Alexander Lemchik, managing partner of the law firm Lemchik, Krupsky and Partners. To prevent the tax authorities from drawing conclusions about the unreasonableness of the tax benefit, companies need to collect a “dossier on the reality of the transaction”: photo reports, minutes of meetings, correspondence, contact details, commercial offers, information on internal tenders when concluding contracts, memos on economic, production, organizational need for contracting. Legally correct paperwork and due diligence will also play in favor of the taxpayer, he is sure.

Business purpose instead of economic feasibility

The second prerequisite for companies to be able to account for expenses and deductions from the tax base is the presence of a business purpose for the transaction, and not just a desire to optimize taxes.

The concept of a business goal is quite common in tax legal relations. European countries. Its essence lies in the fact that the actions of the taxpayer are not called into question if he has a reasonable economic goal in addition to the tax optimization itself. “The amendments to the Tax Code of the Russian Federation are an attempt by legislators to introduce the concept of a business goal, which has migrated to Russian practice from the foreign doctrine of business purpose, legitimized in 2006 by the Supreme Arbitration Court of the Russian Federation,” says Marat Agabalyan, partner at the law firm TertychnyAgabalyan.

In Russia, attempts to establish the obligation of a business purpose as an indispensable condition for the recognition of expenses and deductions have been made repeatedly. For the first time this concept was proposed by the lawyers of the company Haarmann, Hemmelrath & Partner, which won back in 2006 the competition of the presidential administration to develop a mechanism for distinguishing between legal and illegal tax optimization. However, the legislators did not dare to fix this norm in the code.

Arbitration courts, on the other hand, considered the business purpose of the transaction as an important, but far from the only condition for the right of the taxpayer to recognize expenses.

However, lawyers believe that in practice, in case of disputes with tax authorities, the amendment will not change the situation much. Thus, the amendments do not describe ways to prove that the main purpose of the transaction is not non-payment of tax, Diana Maklozyan reflects, which means that these issues will again be decided by the court. For example, if you are engaged in the sale of products, then the cost of purchasing construction equipment will raise questions from the tax, Maklozyan gives an example. Therefore, you need to be clear about how the costs are related to your activities and how you can prove during the verification that the services were actually received. “Most likely, the Federal Tax Service of the Russian Federation will continue to challenge the economic feasibility of taxpayers' transactions. After all, the new rules do not directly prohibit this,” Marat Aghabalyan agrees.

Oleg Ovchar, head of the legal department of the Federal Tax Service of Russia, thinks differently: “Information about violations of tax laws by a company can be very different. No one will impose any restrictions on the use of this information to identify violations in the payment of taxes and the return of funds to the budget. But we do not study the economic feasibility of transactions. We check, firstly, whether the transaction was executed by the counterparty, and secondly, whether the costs of the transaction were justified, that is, whether they served to achieve an economic result. That's all."

Tax Code of the Russian Federation vs Resolution of the Plenum of the Supreme Arbitration Court

A separate question that remains open is how the amendments to the Tax Code of the Russian Federation will work together with the current resolution of the plenum of the Supreme Arbitration Court of the Russian Federation, lawyers interviewed by RBC indicate. Their opinions on this matter differed.

Thus, Marat Aghabalyan believes that the amendments to the Tax Code were made in order to bring the current legislation in line with the established judicial practice. “The new article 54.1 of the Tax Code of the Russian Federation supplements the decision of the plenum of the Supreme Arbitration Court, but does not introduce anything fundamentally new,” he says. Alexander Yerasov has a similar opinion: “In fact, a new article (54.1 of the Tax Code. — RBC) is an abbreviated version of the decision of the Supreme Arbitration Court No. 53. But, he stipulates, "with many gaps and very fuzzy terminology." It remains to be hoped, Erasov continues, that when considering disputes in order to protect bona fide business, arbitration courts, in addition to the provisions of the new article, will also continue to apply the provisions of the resolution of the SAC Plenum that are absent in it.

The new article also lacks such important guarantees as the presumption of the good faith of the taxpayer, the concept of due diligence and the actual economic meaning of transactions, Erasov adds, which were established by the decision of the SAC. The legislator did not build new rails, but paved additional ways for the tax authorities, Denis Savin, senior lawyer at BGP Litigation, points out.

Oleg Ovchar sees the joint work of the amendments and the resolution of the plenum of the Supreme Arbitration Court as follows: “We (the tax department. — RBC) strive for transparency in relationships with business. The new Article 54.1 introduced two clear and understandable conditions for the recognition of transaction costs into the Tax Code: the reality of the fulfillment of obligations by the counterparty and its business purpose. These conditions are basic. Based on them, decisions will be made on the recognition or non-recognition of expenses and deductions. Other criteria, including those mentioned by the SAC Plenum in Resolution No. 53, can be used as additional ones.”

Businesses must be vigilant

In view of the foregoing, businesses should double their vigilance, sums up Alexander Erasov: “The new article 54.1 of the Tax Code of the Russian Federation provides for much fewer mechanisms for protecting the rights of bona fide business compared to Resolution No. 53 of the Supreme Arbitration Court and much more opportunities for substantiating the additional charges made by the tax authorities.”

In addition, the law is permeated with new terminology, but does not define these terms, Savin points out: “For example, it is not entirely clear what should be understood by “distortion of information about the facts of economic life”, “rights in calculating the tax base”. This allows for an extremely broad interpretation of the law, the lawyer believes.

Also, entrepreneurs should not think that methods of obtaining tax benefits that do not fall under the provisions of the new law are now legalized, Denis Savin explains. Such methods of aggressive tax optimization, such as or attracting offshore companies, really do not fall under the new article of the Tax Code, he explains, but in court the Federal Tax Service can still prove the illegality of these schemes, relying on the same decision of the Supreme Arbitration Court.​