| The list of prohibited tax schemes is formed without the participation of officials Without waiting for the authorities to legislatively define the criteria separating legal tax minimization from illegal ones (the Ministry of Finance promises to present a report on this next week), businesses are independently trying to find out the legality of their “scheme formation”. This has to be done literally at random: by initiating an analysis of the scheme in court even before the fiscal authorities have made claims against it. According to the participants of the conference “Tax Optimization: Limits of the Permissible and Possible,” this is now the only way to insure against possible attacks from fiscal officials in the future.
The legislation of any country today recognizes the right of an enterprise or citizen to optimize their taxes. However, in practice, today any entrepreneur who optimizes taxes in one way or another can be brought to criminal liability.
Russian laws are full of holes not only for entrepreneurs who are looking for loopholes in the laws that allow them to cleverly avoid tax liability. The security forces are now looking for the same holes in the laws, contrary to the presumption of innocence, adopting the principle “everything that is not expressly permitted is prohibited.”
As Western analysts say, this situation is quite typical for countries with economies in transition, where, moreover, tax, civil procedure and criminal legislation have been radically rewritten relatively recently. Russian legislators are gradually erasing the blind spots, eliminating discrepancies in the Tax Code. However, the process is very slow. The idea of creating a list of illegal tax minimization schemes in one fell swoop has been haunting many departments that are in one way or another responsible for government money for several years now. The Ministry of Finance and the Ministry of Taxes (now the Federal Tax Service), the Accounts Chamber and the tax police, now transferred to the jurisdiction of the Ministry of Internal Affairs, the Constitutional and Supreme Arbitration Courts, tried to do this. But no one has succeeded yet.
The law clearly recognizes both tax evasion and the provision of knowingly false information about one's tax obligations as a violation. However, the provisions of the law do not determine from what moment evasion begins: from the moment the object of taxation appears, from the day when the law requires filing reports, or from the date when the tax must be paid into the budget. As a rule, investigative authorities believe that the obligation to pay taxes begins from the moment the taxpayer “realizes” the fact that he has a certain object of taxation. In fact, a person who bought real estate yesterday but did not pay taxes today can be considered a draft dodger.
For many years, lawyers, tax authorities and payers have been arguing in courts about the moment when tax liability arises. But since this issue was not clarified legislatively for several years, the stock of theorizing was exhausted. And the debate about minimization has again returned to the level of creating stencils for legal transactions.
Officials of the Ministry of Finance began to declare that if a transaction has no other economic content than to reduce taxes, this is evasion. The “economy officials”, represented by the Federal Service for Combating Tax and Economic Crimes of the Ministry of Internal Affairs, armed themselves with the simplest indicator: if the laws are violated, this is evasion, if not, then optimization. Pretending that they do not understand at all why such “strange” questions arise about the legality and illegality of evasion. Investigative authorities bring the taxpayer to justice not even under the article, but according to the “set” of signs that allegedly prove a criminal intent. If the transaction, in the opinion of the investigators, does not make “economic sense,” it becomes hopeless for the accused to prove the absence of criminal intent.
The only salvation from the unpredictable behavior of law enforcement agencies and fiscal officials is now the preventive appeal of taxpayers to the courts with claims to recognize a particular scheme as legal. This turns the relationship between business and the fiscal on its head (it is the latter who must prove the illegality of the scheme in court, and not the payers to defend themselves), but this is how many large enterprises now understand tax planning that is adequate to the current situation.
According to Wilhelm Haarmann, partner of the international bar association Haarmann Hemmelrath, “in the EU countries, the tax system is more complex than in Russia, but we always advise those investing in your Russia to budget for tax risks more than is obtained from purely arithmetic calculations of the tax burden.” The head of the Mosinvestproekt audit bureau, Marina Mikhailova, agrees with him: “The selective application of tax laws and high-profile processes have increased the risk of tax optimization, so companies are ready to shell out enormous amounts of money on litigation, trying to close the gap in the legislation with a court decision.” True, decisions of arbitration courts are not precedent-setting in nature. Otherwise, compiling a list of “criminal minimization” carried out by the Ministry of Finance would be significantly simplified. Irina SKLYAROVA |
|
