VimpelCom Defeats Federal Tax Service
Posted: Mon Jan 20, 2025 5:09 am
why it was appointing an audit outside the two-year period."
How it all happened
On December 29, 2020, the bahamas whatsapp resource Federal Tax Service ordered an audit of Beeline, as a result of which it assessed an additional RUB 179 million in income tax on the transaction with VWS, recording a deviation of prices from market prices, which served as a precedent for further legal proceedings.
In November 2023, the Federal Tax Service stated that a new transaction (with VEON) appeared in the amended notice, the scope of services of which overlaps with the transaction being verified with VWS. "This means that the amended notice contained new information that is important for verifying this transaction. The deadline should be counted from the amended notice, as the Constitutional Court of the Russian Federation said," said Rustem Akhmetshin, senior partner of the Pepeliaev Group law firm.
The Ninth Arbitration Court of Appeal of the City of Moscow, after Beeline appealed the first instance decision in favor of the Federal Tax Service, sided with the operator. On April 23, a court hearing was held, as a result of which Beeline received satisfaction of the petition. Judge of the Ninth Arbitration Court of Appeal of the City of Moscow Sergei Zakharov overturned the latest decision of February 7, 2024, of the Moscow Arbitration Court to completely reject VimpelCom's filed claim, and recognized the decision of the Federal Tax Service of December 29, 2020 to appoint a tax audit along with its results in relation to VimpelCom as illegal.
Read also
The Ninth Arbitration Court of Appeal of the City of Moscow, after PJSC VimpelCom appealed the first instance decision in favor of the Federal Tax Service, sided with the operator. The issue of cassation remains open.
The court's decision and the lawyers' opinion
The Arbitration Court of the Moscow District upheld the decision of the Ninth Court of Appeal dated 27.04.2024 and dismissed the cassation appeal.
Rustem Akhmetshin argues that in a state governed by the rule of law, tax authorities must follow the law: "It cannot be that a tax authority, citing circumstances that seem important to it, appoints an audit outside the established deadlines. The dispute turned out to be complicated. Arbitration courts and the Supreme Court spoke out many times, and in the end we reached the Constitutional Court. More than 3.5 years have passed since the audit was appointed. At the end of 2020, the Federal Tax Service appointed this audit, and in February 2021, we began legal proceedings. During this time, we lost in arbitration courts of four instances, then in the Supreme Court, challenging the order of the Federal Tax Service, which regulates the procedure for appointing such audits. But in July 2023, the Constitutional Court made a decision on our complaint and said that the provision of the Tax Code, on the basis of which the Federal Tax Service appointed the audit, does not comply with the Constitution."
Leading lawyer of the Pepeliaev Group law firm, Alexander Kuznetsov, commented: "The Federal Tax Service has attracted enormous resources to conduct the audit, and it turns out that it was in vain. In the end, it turned out that the additional charges that the tax authority made based on the results of the audit were simply illegal. The significance of this case is that this is the first time that the Federal Tax Service's decision to appoint an audit has been recognized as unlawful. This is also the first case where additional charges based on the results of a transfer pricing audit are unlawful due to an error in appointing the audit."
How it all happened
On December 29, 2020, the bahamas whatsapp resource Federal Tax Service ordered an audit of Beeline, as a result of which it assessed an additional RUB 179 million in income tax on the transaction with VWS, recording a deviation of prices from market prices, which served as a precedent for further legal proceedings.
In November 2023, the Federal Tax Service stated that a new transaction (with VEON) appeared in the amended notice, the scope of services of which overlaps with the transaction being verified with VWS. "This means that the amended notice contained new information that is important for verifying this transaction. The deadline should be counted from the amended notice, as the Constitutional Court of the Russian Federation said," said Rustem Akhmetshin, senior partner of the Pepeliaev Group law firm.
The Ninth Arbitration Court of Appeal of the City of Moscow, after Beeline appealed the first instance decision in favor of the Federal Tax Service, sided with the operator. On April 23, a court hearing was held, as a result of which Beeline received satisfaction of the petition. Judge of the Ninth Arbitration Court of Appeal of the City of Moscow Sergei Zakharov overturned the latest decision of February 7, 2024, of the Moscow Arbitration Court to completely reject VimpelCom's filed claim, and recognized the decision of the Federal Tax Service of December 29, 2020 to appoint a tax audit along with its results in relation to VimpelCom as illegal.
Read also
The Ninth Arbitration Court of Appeal of the City of Moscow, after PJSC VimpelCom appealed the first instance decision in favor of the Federal Tax Service, sided with the operator. The issue of cassation remains open.
The court's decision and the lawyers' opinion
The Arbitration Court of the Moscow District upheld the decision of the Ninth Court of Appeal dated 27.04.2024 and dismissed the cassation appeal.
Rustem Akhmetshin argues that in a state governed by the rule of law, tax authorities must follow the law: "It cannot be that a tax authority, citing circumstances that seem important to it, appoints an audit outside the established deadlines. The dispute turned out to be complicated. Arbitration courts and the Supreme Court spoke out many times, and in the end we reached the Constitutional Court. More than 3.5 years have passed since the audit was appointed. At the end of 2020, the Federal Tax Service appointed this audit, and in February 2021, we began legal proceedings. During this time, we lost in arbitration courts of four instances, then in the Supreme Court, challenging the order of the Federal Tax Service, which regulates the procedure for appointing such audits. But in July 2023, the Constitutional Court made a decision on our complaint and said that the provision of the Tax Code, on the basis of which the Federal Tax Service appointed the audit, does not comply with the Constitution."
Leading lawyer of the Pepeliaev Group law firm, Alexander Kuznetsov, commented: "The Federal Tax Service has attracted enormous resources to conduct the audit, and it turns out that it was in vain. In the end, it turned out that the additional charges that the tax authority made based on the results of the audit were simply illegal. The significance of this case is that this is the first time that the Federal Tax Service's decision to appoint an audit has been recognized as unlawful. This is also the first case where additional charges based on the results of a transfer pricing audit are unlawful due to an error in appointing the audit."