Favorable Tax Environment – 2009
- By Lyudmila Batalova
- Dec. 09 2008 00:00
It should be pointed out that SAC Resolution #53 laid down the "substance over form" concept and provided a benefit for law tax planning opportunities. However, many taxpayers are displeased by the introduction of a civil law concept of "due care" to tax legal relations. This means that a taxpayer now needs to prove the performance of due diligence of its suppliers. In practice it is done via collection of documents confirming that the supplier is acting in good faith.
All of the above considered, the tax benefit concept is still a great leap forward from the concept of a bona fide taxpayer. The "good faith" taxpayer approach is not formalized in the tax legislation either. One may find its key features in non-normative acts (orders) of the Federal Taxation Service of the Russian Federation ("FNS"), e.g. 109 features of a "bad faith" taxpayer. Usually, these orders are of the "DSP" type, which means "for internal use (of the tax authorities) only." Nevertheless, the content of such orders is available on the Internet and in the press. It is also should be noted that FNS made publicly available a Conception for field tax audit planning (FNS Order #??-3-2/467@). If a taxpayer's activities may be linked with the 11 "suspicious" factors mentioned in the Conception, most likely the tax authorities will inspect such taxpayer on a field basis. In fall 2008, the Conception was updated with the 12th factor: "Carrying out business activity with high tax risk." One may find the exact list of the "risky" operations in the updated version of the Conception.
The above concepts may be used by taxpayers to create a favorable tax environment by self assessment of tax risks in the upcoming year 2009. However, claims of Russian tax authorities inspired by the token approach are still prevailing. If that is the case, taxpayers may protect their interests in arbitration courts basing their legal views on judicial acts of SAC and Constitutional Court of the Russian Federation.