Challenging unlawful decisions to assess additional taxes

Background

During a desktop inspection, the Federal Tax Service has applied retrospectively a cadastral value which was increased by the City Property Department of Moscow in the end of the tax period. As a result, the company was charged a large additional amount of tax which could have a material adverse impact on its financial situation.

The Case

CG specialists examined the legal grounds of FTS position and identified its vulnerability, namely inconsistency with article 5 of the RF Tax Code. The tactics chosen by the lawyers were to analyze the cadastral value revision process which, if strictly observed, would not allow the application of increased cadastral value to the past tax periods.

As a result, the arbitration court declared the claims of the tax authority illegitimate and rescinded the additional tax charges.    

Why is it of importance?

Unfortunately, FTS tends to raise this type of claims broadly. Reports on similar cases examined by the Arbitration Court of Moscow suggest that only 20% disputes are won by taxpayers. CG specialists managed to develop the proper legal position to avoid unjustified charge of additional taxes on corporate property for the previous tax periods. This tactics may be used to further promote our clients’ interests in similar circumstances.