When the three years for a refund of an overpayment start

In 2019 a company owned a property. It had been included in the List of assets on which property tax is paid on cadastral value.

• After the Moscow City Court decided that the property was to be removed from the List, the company filed amended tax returns and, in January 2023, applied to the tax authority for a refund of the overpayment.

Because the overpayment was not refunded in full, the company went to court.

The courts of first instance and of appeal held that the three-year period for a refund of the overpayment must be counted from the date on which the decision of the Moscow City Court entered into force. The circuit court, by contrast, considered that the three-year period must be counted from the date of the payment orders that gave rise to the overpayment.

The Supreme Court took a fundamentally different position. It held that the three-year period for a refund of the overpayment must be counted from the date on which the annual tax return was filed (ruling of the Judicial Panel of the Supreme Court of 12 March 2025 in case No. А40-195715/2023, on an application by Ilged, a limited liability company).

Taxpayers bring proceedings to have assets removed from the List so that, as a result, they can recover the tax they have overpaid. It is obvious that, until the taxpayer has a judicial act that has entered into force removing the asset from the List, the tax authority will not refund the overpayment.

It was therefore entirely logical to suppose that the three years for a refund of the overpayment should be counted from the date on which that judicial act entered into force. Many courts agreed.

The Supreme Court, however, consistently rejects that way of counting the three-year period. A clear example is the ruling of the Judicial Panel of the Supreme Court of 13 December 2024 in case А55-28933/2023 (LIK-Servis, a limited liability company).

In the new ruling of 12 March 2025 the Supreme Court brought still greater clarity to the question of how the three-year period is counted.

Proceedings to have an asset removed from the List sometimes last for years. Taking steps to have the asset removed from the List, however, lies wholly within the taxpayer's own control and responsibility. The Supreme Court pointed this out in its ruling of 19 June 2023 in case No. А40-60643/2022.

Therefore, in order to "fit" within the three-year period for a refund of a tax overpayment, counted from the date of the annual return, we recommend that owners of real estate promptly identify an erroneous inclusion of their assets in the relevant List, and go to the courts as soon as possible to have the assets removed from that List, comments Andrey Rymarev, head of tax practice at Consul Group.

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