The company has obtained an unjustified tax benefit: formal transfer of activities to a related person.
Description of the situation
The company has formally transferred part of its trading activities to a related person. Having discovered this, the inspectorate has combined the indicators of both organizations and established non-payment of VAT, as well as overstatement of losses when calculating profits tax.
Position of the company
The company has insisted that the tax inspectorate incorrectly calculated penalties for non-payment of VAT. In the company's opinion, penalties must be recalculated taking into account the deadlines and taxes paid under special regimes.
Position of the tax authorities and courts
The inspectorate has combined the indicators of two organizations, revealing non-payment of VAT and overstatement of losses when calculating profits tax. The courts have recognized the inspectorate's calculation as correct, supporting the position of the tax authorities.
Position of the Supreme Court:
- When determining the moment of fulfillment of VAT tax liabilities, it is necessary to take into account that the income and taxes paid by the participants in the scheme have been combined. This means that all tax liabilities are considered as a whole.
- Each organization within the scheme has paid taxes to the budget in accordance with the applicable special taxation regimes. These payments must be taken into account when determining the total amount of tax liabilities.
- The participant in the scheme is considered to have fulfilled his/her tax liabilities at the moment of transferring funds to the budget in or towards payment of taxes related to the activities, the income from which has been attributed to the company. This happens regardless of which organization has made the payment.
- There are no grounds to believe that the budget has suffered any losses requiring compensation in the form of penalties. The Supreme Court of the Russian Federation has emphasized that taxes paid can be offset against debts on both profits tax and VAT.
- The Supreme Court has also referred to its Decision on a similar case, which stated that the tax paid is subject to offset against the debt not only for profits tax, but also for VAT. When assessing the legality of collecting penalties, it is necessary to take into account the state of the taxpayer's settlements with the budget in the period between the occurrence of the liability to pay the tax and its actual fulfillment.
Thus, the Supreme Court of the Russian Federation has confirmed that tax liabilities must be considered as a whole, taking into account all taxes paid and special regimes, as well as without unjustified penalties, if the amounts paid can be offset against debts on various taxes.
Document: Decision of the Supreme Court of the Russian Federation dated 04.09.2024 No. 307-ЭС24-5688