Sergey Arakelov. Tax service doubles penalties from bankrupts

The approaches that the Federal Tax Service uses in its work are largely consistent with the practice of tax authorities in other countries, says Deputy Head of the Federal Tax Service Sergei Arakelov. In an interview for Zakon magazine, he talks about the reasons for the decrease in the number of tax disputes, the mechanisms of pre-trial settlement, the practice of unjustified tax benefits and the collection of payments from dependent persons.

— Sergei Ashotovich, at a recent speech in the Federation Council and in the State Duma, when discussing tax policy, the head of the Federal Tax Service mentioned, among other things, that this year the number of tax disputes has decreased significantly, and the number of court cases has decreased by three times. What is the reason for such a sharp decline?

— To answer this question, you need to look at the dynamics of the development of the Federal Tax Service over the past 6 years. For example, in 2010, the number of arbitration disputes exceeded 80 thousand, and in earlier years it reached 100 thousand. Of course, such a huge number of disputes did not suit either the state or business.

It was necessary to improve the quality of administration, as well as introduce a system of “internal reviews”. The mandatory system of pre-trial appeal of tax disputes was adopted by law back in 2006, with a delay in entry into force for three years. In 2009, it became operational in relation to decisions on tax audits. At first, it did not function very effectively, which was largely due to the fact that the tax authorities were not ready to revise their own decisions, a kind of corporate solidarity worked: in any case, we must support our decisions, and it is already a matter for the court to cancel incorrect decisions .

After that, we legally extended this procedure not only to decisions on inspections, but also to all other disputes that arise from tax legal relations: this is challenging actions (inactions), demands or other acts of tax authorities. We have often heard reproaches that we are replacing the judiciary and are actually depriving lawyers of work, why are we taking on such a burden, etc. But we were confident that by reducing the number of legal disputes, we would not only relieve the courts, but also improve the quality of our work, bringing to court only cases with a sufficient evidence base and well-founded conclusions.

In addition, we have changed the approach to inspections. We have practically stopped checking small businesses; checks of other payers have become targeted. If earlier inspectors often did not have an understanding of who and what needed to be checked, now we go out for inspection only if we have data indicating that the taxpayer has carried out risky transactions.

— That is, the main factors in reducing tax disputes were the introduction of pre-trial appeals and a reduction in audits?

- Not only. This also improves the quality of work. When we extended pre-trial appeal to all categories of disputes, and not just to inspections, we perfectly understood that for two years we would only receive an array of complaints. But now the pendulum has swung in the opposite direction, and we, considering complaints and revising decisions of territorial inspectorates, show them mistakes and develop uniform legal approaches that are understandable to both inspectorates and business. The quality of evidence collection, the quality of audits, and taxpayer administration in general is growing, and this is reflected in the results of our work in court.

— Now the tax service will administer both insurance premiums and customs payments? Will there also be an appeal system?

— Administration of insurance premiums, indeed, will be transferred to us starting next year. The law has been amended, and now the requirement for a mandatory pre-trial appeal procedure has been extended to disputes related to the administration of insurance premiums. We have an absolute understanding of how to build a system for insurance premiums. It seems to me that from the point of view of the approaches used for taxpayers, the transfer of relevant functions to us is a big plus. After the pre-trial procedure is introduced, the dynamics of the number of disputes regarding funds in the courts will be completely different, since the approaches that we applied within the framework of tax payments, we, accordingly, will apply here.

As for customs payments, it was decided that the information bases of the tax service and the customs authority should be integrated, but this only means that we must work together, and not that the tax service takes over the function of the customs service. Customs payments are still administered by the customs service. If customs applies our pre-trial procedure, we will only be happy. We have repeatedly said that we are ready to transfer experience, but again, this is a separate department, and the decision-making remains with them.

— What other mechanisms, besides pre-trial settlement, in your opinion, will help avoid legal uncertainty?

— As for legal certainty in the tax sphere, the tax monitoring mechanism, which is now used in relations with major taxpayers, has proven itself very well. This is a special form of tax control in which the taxpayer provides the territorial tax authority with access to accounting and tax reporting online, and the inspectorate, in turn, does not conduct on-site and desk tax audits.

As part of tax monitoring, starting this year a unique mechanism has also been proposed - tax ruling. The global idea of ​​tax ruling is that the taxpayer receives the position of the tax authority even before the transaction is carried out in order to assess the tax consequences. In response, the tax service presents its position. This is how certainty is achieved. The Tax Code establishes the position that if we have adopted ruling, then we will not return to this issue. The taxpayer is protected from both penalties and taxes in connection with the receipt of ruling.

— The tax monitoring system has been in place for a year. The assessments are very positive, and many taxpayers are interested in the further development of this form of tax control, including for medium-sized businesses. Is this possible?

— In my opinion, introducing tax monitoring for all taxpayers now is not entirely correct (by the way, most countries are not following this path either). Tax monitoring is an online check without visiting the payer, which presupposes that the taxpayer has a high-level internal control system and the ability to organize an effective information exchange with the tax authority. And so far we have introduced it for the largest payers; we have provided that we do not go to them for inspections, and they, in turn, provide us with accounting data online. We review this data over a period of time, and if we have questions, we forward it to taxpayers in order to resolve any possible tax conflicts before filing tax returns.

Today we are working within the framework of tax monitoring with seven taxpayers, and in the near future about 20 more major companies should join this system. And in the future, I do not exclude the possible expansion of the tax monitoring system to a wider range of payers.

— A significant decrease in the number of tax dispute cases may indicate stability in this area. But there has been a tendency towards the emergence of a mass of evaluative concepts at the level of law enforcement practice. I would like to ask about the practice on the issue of recognition of unjustified tax benefits, as well as about establishing cases of failure by the taxpayer to exercise due diligence when choosing counterparties, which are also taken into account in such disputes. There is an opinion that the positions of the Supreme Arbitration Court have recently been subject to revision. From your point of view, is this a far-fetched trend?

— In my opinion, when considering disputes by the Supreme Court, there is a continuity of those positions that were once developed by the Supreme Arbitration Court.

The Supreme Court, and primarily the Economic Collegium, currently supports the concepts that were laid down by the Supreme Arbitration Court. Moreover, it seems to me that the court achieves a certain balance of interests of the state and business. So it is wrong to talk about revising the legal positions of the Supreme Arbitration Court.

As for law enforcement practice on the concept of unjustified tax benefit, ten years have already passed since the adoption of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53 on unjustified tax benefit, which is the merit of the Supreme Arbitration Court. At that time, the adoption of the Resolution was the most important task; it was expected, especially taking into account the fact that the Tax Code did not have criteria for the dishonesty of payers.

Here it is necessary to take into account that a lot has happened over ten years, including changes in aggressive tax planning schemes used by unscrupulous taxpayers. And, of course, law enforcement approaches must evolve and not be perceived as some kind of constant.

— Tell me, are you a supporter of enshrining the rules for assessing unjustified tax benefits in the Tax Code or do you think that the formation of law enforcement approaches on this issue in the future can replace the source of law that establishes the criteria for bad faith and failure to exercise due diligence?

— We have repeatedly said that all provisions of the Code are aimed at conscientious taxpayers. As a result, when conducting audits, tax authorities are forced to rely on and refer to judicial acts. It is not right. In many foreign jurisdictions, anti-abuse provisions are enshrined in tax codes, so, in my opinion, it is necessary that such provisions be contained in our legislation.

Deputy A.M. Makarov came up with such a proposal, and the first reading was passed back in 2015. The general concept of the amendments that we support provides for the introduction of a legislative concept of abuse of rights by the taxpayer.<…>Another point that the bill contains is the so-called concept of due diligence. The bill conveys the idea that if the state provides certain preferences to the taxpayer, in particular expenses in terms of reducing profits and VAT deductions, then the taxpayer, in turn, should receive these benefits only if the agreement that he concludes with the counterparty is signed by an established person and is actually executed by him.

“At the same time, taxpayers often face the problem that they may not receive all the information they would like. This is also due to tax secrecy.

- This is a very important question. I would like to draw your attention to the information provided by the Federal Tax Service. In addition to the Unified State Register of Legal Entities, there are databases containing information about persons who have renounced their signatures stating that they are leaders in the courts; about persons who do not provide reports; persons with mass founders, mass managers, as well as a register of disqualified persons. Currently, it is legislatively established that information about the size of an organization (how many people are on staff), debt (today this is also public information), data on taxes paid, income, and expenses are not tax secrets.

In addition, when concluding a contract directly with its counterparty, any person must understand what kind of organization it is, whether it is on the market, and whether it is active.

— The tax authorities began to classify the withdrawal of assets after inspections and legal proceedings as cases of abuse. In your opinion, are these cases forming a new trend?

- It’s true that this is a trend. In reality, what are we facing? In general, in the Russian Federation there are often cases when, after legitimate tax claims (including those that took place in court proceedings, in which the taxpayer was active until the last resort and continued to carry out activities), there were no revenues to the budget as a result. We began to analyze these cases and saw that payers often ceased their activities by declaring themselves bankrupt.

<…>But in a number of cases we are faced not with ordinary bankruptcy, but with situations where, having initiated a bankruptcy procedure, the organization continues to conduct the same activities, only within the framework of a new legal entity. The same persons, the same founders, the same beneficiaries, the same activities with the same contractors. A new identical legal entity is created, with the same name, but with a different TIN. At the same time, contracts with all counterparties are renegotiated. It is obvious that there was a transfer of activities in order to avoid paying taxes by one enterprise, but with the preservation of the business as a whole. Isn't this an abuse of right? When we see that a taxpayer is using a tax evasion scheme, including through bankruptcy, in our understanding this is illegal.

As is known, the previous version of Art. 45 of the Tax Code of the Russian Federation had a number of shortcomings and practically did not work. We were the initiators of changing the wording of Art. 45 of the Tax Code of the Russian Federation on the collection of taxes from dependent persons. When this norm was adopted, there were quite serious discussions regarding what kind of dependence we were starting from. From the dependence provided for in the Tax Code, or from the general dependence that is established within the framework of civil legislation? And if you remember, we focused on the criteria established specifically in civil legislation. In addition, courts may, taking into account other established circumstances, recognize companies as affiliated.

Back in 2011, the Supreme Arbitration Court of the Russian Federation drew attention to the problem of business transfer and debt collection from a dependent person in one of its decisions. These trends have found their development taking into account the new wording of Art. 45 of the Tax Code of the Russian Federation in one of the latest court cases considered by the Supreme Court on the situation of counteracting taxation by transferring a business to a dependent person.

— Do you consider every such case at the Federal Tax Service?

— Yes, every case that goes to court goes through us. That is, the level of decision-making is very high. This does not mean that the court will always support us. But at the moment, the approaches that we adhere to and the appeals that go to court are very well-calibrated.

The most important thing we want to achieve from the use of such mechanisms as collection from interdependent persons is to create a stable understanding that we will respond to abuses and tax evasion and have working tools for this. We look forward to increasing the overall level of payment discipline among taxpayers.

— Recently, at a meeting of the expert council at the Federal Tax Service “Improving the practice of applying bankruptcy legislation,” you stated that it is necessary to move to civilized methods of bankruptcy. What steps will be taken in this regard? Should we expect any legislative initiatives in the near future?

— A significant part of the legislative initiatives have in fact already been adopted. Subsidiary liability in bankruptcy has been strengthened - this is a mechanism close to recovery from interdependent persons, which allows you to make claims against controlling persons and transfer the debt to the beneficiary of the debtor. The statute of limitations has been increased from two to three years, it is more clearly indicated that not only the nominal status of the manager or founder, but also other things, such as family or official ties, will now be the basis for the conclusion that the new defendant actually had the opportunity to influence activities of the debtor and is obliged to answer for his failure to fulfill his obligations.

In addition, targeted changes have been made that should prevent tax evasion through bankruptcy procedures - now it will be impossible not to pay current tax payments in bankruptcy, calling all other expenses, including the withdrawal of money to offshores, operational payments. The deadline for filing tax claims in situations where it is not possible to carry out the so-called accelerated bankruptcy after a tax audit has been ordered has been increased.

Judicial practice is also developing: recently there are precedents for the subsidiary liability of beneficiaries, and for tenders, and for operating payments.

Such counteraction to abuse will bring us closer to the civility of bankruptcy procedures. I believe that civilized bankruptcy is one that is not associated with evasion of taxes or other debts. If a procedure is carried out with clear economic prerequisites, this is absolutely normal; there is no pressure on taxpayers here and cannot be. On the contrary, we strive to help the conscientious taxpayer. This can be done primarily through debt restructuring in relation to bona fide debtors who are actually interested in restoring their business: not to legalize the default on debt, but to restore solvency. The flow of requests for installment plans and deferments has increased - we see this, there is a trend. Moreover, legislative changes are being prepared to expand the provisions for the provision of installment plans and deferments in the administrative procedure. There are such mechanisms in bankruptcy. This year we have concluded about five hundred settlement agreements.

— As part of global trends to counteract aggressive tax planning, I wanted to ask you about the current practice on the issue of the actual right to income when paying income from Russia. Is this a priority for you now?

- Yes this is true. Recently, key tax administrations have been faced with the shift of income to low-tax jurisdictions, and Russia is no exception. In this regard, the Organization for Economic Co-operation and Development (OECD) has developed a number of measures to counter the removal of profits from taxation.

In Russia, we also see that many companies, unjustifiably taking advantage of the benefits contained in double taxation agreements, transfer profits to low-tax jurisdictions through various mechanisms: royalties, interest, consulting services. And accordingly, no tax is paid to the budget of the Russian Federation, despite the fact that the profit itself was received from activities on its territory.

Currently, the practice of the OECD and the Federal Tax Service is based on the fact that the actual recipient of income cannot be a person who does not have the right to control its economic fate. To this end, in international practice, and then in Russian practice, a number of concepts began to be actively used, including the inadmissibility of using conduit companies and the establishment of the final beneficiary.

It is important to note that the approaches that have been developed by the Federal Tax Service today do not deviate from the general practice of tax administrations around the world and, in my opinion, will remain relevant in the near future.

The interview is presented in abbreviated form. Read the full version in the October issue of the magazine "".

Deputy Head of the Federal Tax Service (FTS) of the Russian Federation Sergei Arakelov, in an interview with Kommersant, summed up the results of the program for introducing out-of-court procedures for resolving disputes with taxpayers.

The President signed a law introducing the institute of tax monitoring in the Russian Federation. Is this the final stage in the development of conciliation procedures in the tax system?

Yes. We had a concept for introducing pre-trial methods of resolving disputes. And now we can talk about the unique experience of implementing this project. We have introduced internal review procedures for all disputes - both tax and registration matters. We introduced a tax monitoring regime and a mechanism for settlement agreements in the tax sphere. To date, we have implemented the entire range of measures.

- What was the final goal of the changes?

Improving the quality of administration, reducing the number of disputes and increasing certainty in the application of tax legislation. After all, a conscientious taxpayer wants to pay taxes correctly and have fewer conflicts with the tax service, but does not always know our position. Therefore, we need to tell you how to pay taxes correctly and reduce the number of disputes with taxpayers.

- Judging by the statistics, taxpayers argue with the service less than before, at least in the courts.

In previous years, the tax service was involved in a large number of litigations, which were the result of not always high-quality decisions. The courts were actually overloaded with all this routine. The psychology of both the tax service and payers was this: let’s bring all disagreements to court, and let the court decide everything. Then it was decided to more actively develop conciliation procedures and introduce mechanisms for internal review of decisions. The situation began to change with the entry into force in 2009 of the law on pre-trial settlement of disputes. Initially, it applied only to decisions on desk and field inspections. It was incredibly difficult to change the psychology of our employees - to convince them not to be afraid to independently cancel the wrong decisions of the territorial tax authorities. The result is now visible: over the years the number of complaints has decreased by a third, the number of legal disputes has halved.

After the advent of the pre-trial procedure, many experts said that it would become a formal procedure that would only delay the trial period.

Yes, many believed that we had created a formal mechanism that would lead nowhere, and that the outcome of the appeal would still be a trial. Large businesses said that the tax office would never cancel large assessments on its own. But since 2010-2011 we have seen high-quality and objective consideration of complaints. We overturned more than 40% of decisions of lower bodies. The service revised about 50% of accruals for large businesses. This is significant. We saw that this mechanism was working, after which we decided to extend the pre-trial settlement mechanism to all disputes. And this law has been in effect since this year.

In addition to inspections, we have extended pre-trial appeals to actions and inactions of tax authorities. These are complaints about demands, notifications, untimely tax refunds, procedural issues, including registration of legal entities. We purposefully took on the burden of such disputes. They are simple, and it is important to quickly eliminate the violation of rights. Based on the materials of such complaints, we try to eliminate future cases of errors in each inspection.

The large number of cancellations of decisions of territorial bodies seems to be an ambiguous indicator. It turns out that local tax officials often make mistakes?

In any case, controversial issues arise within the system. The task of the internal review mechanism is to respond quickly to this. That is, do not take a citizen or organization to court for a long time, but quickly, if the tax authorities are wrong, reconsider the decision. The decisions we make are posted on our website. Today we are open and public. As a result of a unified approach, legal positions are unified. Thus, by review we control the quality of decisions of specific tax authorities. And if we see that we are canceling, but nothing changes in the inspection, then this is certainly a negative indicator for this territorial unit.

- Are you punishing?

Of course we punish you. If we did not do this, our mechanism would not work effectively. Disciplinary sanctions are imposed, including dismissal. Moreover, we see an improvement in the quality of our work.

- What happens in the courts with your decisions?

It is very important. There has been a major transition from quantity to quality. And court statistics confirm this. When we started the pre-trial procedure, about 40% won in court in terms of amounts. Today, about 80% of amounts disputed by taxpayers are considered in the courts in favor of the budget. The growth occurred precisely because we reviewed all issues that did not have a judicial perspective on our own. Only important methodological disputes and disputes with unscrupulous taxpayers reach the court. And it is right. You know, progressive international experience shows that in some countries the rate of disputes that reach the court is no more than 10%.

- You said about concluding settlement agreements with taxpayers?

Yes, there were a lot of discussions about them too. In particular, about whether a government body can enter into settlement agreements with a taxpayer.

- Were you talking about the possibility of causing damage to the budget?

Including. And not everything was clear from the point of view of law - whether such agreements were possible or not. For a long time there was a position to go through all the authorities, go to the end and in no case give in to the taxpayer. We then raised this issue before the Supreme Arbitration Court (SAC), which caused a certain furor: no one expected this from us. The Supreme Court acknowledged that settlement agreements are possible. Today we have already concluded more than 40 global agreements. They are concluded at all stages. We concluded the first at the stage of consideration of the issue by the Presidium of the Supreme Arbitration Court, followed by agreements at the stages of first instance, appeal, and cassation. If we see that there are no grounds, there is no longer any determination to go to the end. - What kind of disputes end peacefully?

These may be disputes of a methodological nature, disputes regarding the application of a rule, or there may be situations where the practice of law enforcement has changed. In order to ensure uniform policies and practices, all settlement agreements are agreed upon at the central office level.

One of the latest administrative innovations is the inclusion of a tax monitoring mechanism in the Tax Code?

Yes. In fact, this is a new model of interaction between tax authorities and taxpayers, which is based on the principles of openness and trust. Around the world, this approach is also called enhanced information interaction (horizontal monitoring). The point of the mechanism is that even before filing a return, the taxpayer has the opportunity to clarify all controversial issues with the tax authority regarding the taxation of transactions. That is, certainty arises; the company can actually protect itself from risks in the form of inspections. In return, it provides the tax authority with online access to its tax and accounting data.

To be honest, at first I didn’t really believe that anyone was ready to open up. I wasn't sure if it would work. Then they decided to do a pilot project: they took five companies - those that were ready for this. These are Inter RAO, RusHydro, MTS, EY and Severstal. We have been working with these companies in this mode for two years. We see that it is effective. For example, in relation to one of the “five” companies, the number of disputes has decreased by five times. Over the course of the year, we responded to more than 50 requests from companies regarding tax issues and held more than 60 meetings with them. The bulk of data is in electronic form; the volume of document transmission on paper has decreased significantly. But this is not the most important thing. This is a new level of relationship with taxpayers. We work in dialogue mode, helping to minimize questions and disputes between us.

- Is the Federal Tax Service sure that it will receive full access to company documentation?

During monitoring, we constantly monitor online the reflection of data in accounting, the correctness of calculation and payment of taxes. According to the law, if a company provides false information, we can always initiate a control regime in the form of tax audits. But it seems to me that the moment of trust is very important here. If companies do not provide us with something and we later identify it, a mechanism of sanctions and further inspections will come into force. And it will be difficult to restore trust again. A serious public company is not interested in this.

- Which companies will be able to take advantage of the regime?

The criteria for entering this regime have been established - payment of taxes of 300 million rubles. per year, revenue 3 billion rubles. and assets 3 billion rubles. In general, the law establishes a tax monitoring mechanism, as it is known in world practice. The payer draws up regulations establishing the procedure for access to its reports. At the taxpayer's request, we provide a reasoned opinion on a particular issue. Or we independently identify the topic that needs to be reflected. He, in turn, if he agrees, makes changes to the declaration. If not, the conciliation procedure comes into play. We are specially conducting it at the level of the Federal Tax Service, listening to both sides. This is an opportunity to jointly develop common legal positions. The monitoring agreement is concluded for a year, then it can be extended, and during this period tax audits, both on-site and desk-based, are not carried out.

- Are there any people now willing to join the monitoring?

According to our estimates, a maximum of about 2 thousand payers who meet the above criteria may fall under it. It is clear that many are not yet ready for new administration methods. But we already see about 30 companies that would like to switch to this mode of interaction. We believe that there will be more companies ready for open relationships.

- When should taxpayers decide to join the new mechanism?

The payer can apply until July 2015. I repeat that there was no idea to extend this mechanism to everyone; after all, tax monitoring concerns issues that are difficult to apply and is mainly intended for large businesses with a built-in internal accounting system for compliance with the law. But, on the other hand, if we see the effectiveness of the measures, the access criteria can be adjusted in the future. For example, in Holland, medium and even small businesses - several tens of thousands of companies - participate in monitoring.

- Taking into account all the new mechanisms, how is the Federal Tax Service’s approach to tax audits changing?

We are reducing the level of tax control in relation to bona fide businesses, but increasing it in relation to unscrupulous ones. But these are not total checks. Not at all. On the contrary, every year the number of inspections decreases by about 30%. We have begun to implement a system for modeling taxpayer behavior, where companies with the highest risk areas are selected in a certain industry, and after verification, the results for companies in this industry are widely reported. This is how we create a ripple effect; companies themselves adjust their obligations. There is no need to conduct full-scale audits of the industry. When selecting taxpayers for audits, a risk-based approach is used. This means the inspector must know where he is going and who he is checking. We check taxpayers point-by-point. In particular, we are closely looking at the issues of creating schemes, including transactions through offshore companies, and obtaining unjustified tax benefits. And we control inspections from the beginning until the recovery of amounts into the budget, using all mechanisms, including recovery from dependent companies if the payer hides assets.

- Are there cases of collection of taxes from dependent companies?

Previously, we often encountered a situation where the service carried out an audit, the decision came into force, but the payer transferred assets to another company for the purpose of non-payment of tax, effectively continuing its activities. After all, a new legal entity has been formally created, which is not responsible for the previous one. There was no mechanism to counter this in the Tax Code. A year ago, we introduced a rule that allows us to collect taxes in such a situation from dependent companies. Now the courts have supported us, the mechanism is effective, and we will apply this practice to unscrupulous companies.

- What other legislative initiatives does the Federal Tax Service have regarding unscrupulous payers?

We took the initiative to enshrine in law the prohibition of taxpayers abusing their rights. By and large, the Tax Code is written for the conscientious taxpayer. When there is no “good faith”, we work within the framework of the 53rd ruling of the Supreme Arbitration Court on unjustified tax benefits. That is, when making a decision based on the results of inspections, we actually refer not to the norms of the law, but to a judicial act. Of course, the rules on abuse of law must be enshrined in legislation. These should not be step-by-step instructions on how to prove receipt of unjustified benefits, but it is necessary to establish general principles of prohibiting taxpayer abuse of rights. If a person abuses his rights, then, of course, he should be limited in the use of privileges, benefits, and preferences. Such norms exist in many foreign countries.

- That is, the Federal Tax Service has different approaches to conscientious taxpayers and unscrupulous ones?

That's how it should be. Extrajudicial mechanisms for resolving disputes, the concept of expanded interaction is a reduction in the level of control over bona fide payers. This frees up manpower so we can switch to at-risk payers. And here we must use all legal mechanisms to protect the interests of the budget.

- The program for introducing extrajudicial procedures has been completed. Does the Federal Tax Service have any other innovations planned?

Indeed, we have implemented most of the plans regarding pre-trial procedures. But there is another topic that we plan to approach in the future - tax mediation. This is also a very difficult story - to involve in the consideration of controversial issues a person who would be trusted by both parties: the state represented by the tax authorities and the taxpayer. It is clear that it is very difficult to find an independent and professionally knowledgeable person who would be trusted by both parties. It seems to me that mediators could alternatively be retired judges or representatives of the scientific community - specialists in one field or another. The mechanism itself is interesting, used in many countries. With the help of tax mediation, you can resolve the most complex disputes that require special knowledge. But it is necessary to weigh how harmoniously this mechanism can be integrated into our tax system. In general, as our experience has shown, the introduction of alternative methods of dispute resolution is effective and leads to improved administration and a reduction in conflict.

Interview prepared by Dmitry Butrin

Amendments to the Tax Code, which for the first time introduce directly into legislation a direct ban on tax abuses. The new provisions, in particular the new Article TC 54-1, provide for the denial of tax preferences in the event of the creation of tax schemes aimed at non-payment of taxes, and also establish the criteria for those transactions and transactions that will be considered justified for tax purposes. Deputy Head of the Federal Tax Service (FTS) Sergei Arakelov told Kommersant about how the discussion and adoption of the law took place.

— The President signed the law on tax abuses. To what extent was it necessary to legislate these provisions?

— The Tax Code was originally developed for conscientious taxpayers. There were no provisions in the legislation that indicated abuse. It was necessary to enshrine in the law the basic principles that would help both taxpayers and tax authorities understand the “rules of the game.” After all, most taxpayers are ready to comply with the requirements of tax legislation. The development of amendments to the Tax Code containing conceptual principles has become an objective necessity. Such norms exist in many foreign countries. The introduction of special anti-evasion provisions into national legislation, as indicated by the OECD in its report on Base Erosion and Profit Shifting (BEPS Plan), is one of the measures to prevent tax evasion.

— Many tax consultants spoke out about the advisability of simply copying (transferring) the text of the resolution of the Supreme Arbitration Court of the Russian Federation No. 53 on unjustified benefits into the Tax Code. Why didn't the legislator take this path?

— Resolution No. 53 was a guideline designed to streamline the approaches of the courts on the issue of unjustified tax benefits. The introduced criteria and concepts have been developed for many years within the framework of judicial practice: “business purpose”, “impossibility of actually carrying out transactions”, “lack of necessary conditions”. For many of them, no certainty has been achieved. We all remember how long and differently the practice of “failure to exercise due care and caution” has evolved. The wide discretion of many concepts, as well as the huge number of court decisions on various factual circumstances, made it difficult to uniformly apply the developed law enforcement approaches. In recent years, numerous approaches to assessing the evidence base, determining signs of bad faith of a taxpayer, calculating the received unjustified tax benefit have been formed in law enforcement practice; certain legal positions have been developed at the level of the Supreme Court of the Russian Federation and the Federal Tax Service of Russia, which needed to be summarized. The only correct decision, in my opinion, was to develop uniform and understandable signs that would indicate facts of abuse.

— Work on the bill began many years ago, and during this time it has undergone significant changes. How do you evaluate the final result?

— The law managed to consolidate the most indisputable legal positions. It reflects two main principles. The amendments, which deal with distortion of information about the facts of economic life, about objects of taxation, describe the intentional actions of the taxpayer. The legislator has introduced a ban on the use of tax schemes when committing deliberate actions aimed at non-payment of taxes. The second principle is related to the suppression of the use of fly-by-night companies in their activities. These provisions state that for tax purposes only transactions (operations) that meet two criteria can be taken into account: the main purpose of their implementation should not be non-payment of tax, and it should also be carried out by the declared counterparty (first link).

Thus, the law excludes a formal approach. The broad and vague concept of “failure to exercise due diligence” has been eliminated. After all, any valuation concepts and open lists allow abuse by both the tax authority and the taxpayer. It will be necessary to proceed only from the reality of transactions (operations) carried out by the taxpayer. The departure from formal criteria and the establishment of a limited number of cases when the taxpayer’s actions are regarded as dishonest allowed the legislator to introduce a complete denial of expenses and deductions in the event of establishing and proving such facts. Thus, a certain balance of interests of the state and business has been achieved, so the result can be assessed as positive.

— The law is aimed at eliminating the use of shell companies in their activities. Are we talking about increased responsibility for our counterparties?

— The purpose of the bill is really not only to prohibit the receipt of tax benefits when committing deliberate actions aimed at non-payment of taxes, but also to suppress the use of shell companies in their activities. It is not only the state that must deal with this problem.

If we want to create a healthy competitive environment, the business community must also take on increased responsibilities and respond responsibly to new requirements.

After all, the law does not talk about the second, third and further links of counterparties in the chain, about which the taxpayer may objectively not know. The taxpayer must understand with whom he directly enters into an agreement, whether the counterparty has experience, the ability to fulfill this agreement, and whether the work will actually be performed. Agree, it sounds rather strange to say that a taxpayer is not obliged to check a company with which he is going, for example, to enter into a contract that seriously affects his financial activities. Already today, most participants in economic turnover, based on their capabilities, organize a control system for selecting counterparties. And we see that there are fewer and fewer cases of using shell companies. The number of such tech companies decreases significantly every year. In addition, today much information about taxpayers is open. This provides new opportunities for assessing your own risks and compliance of your activities with legal requirements.

— The Federal Tax Service has already done a lot to ensure that conscientious taxpayers can protect themselves when choosing counterparties: services, reducing the list of information that constitutes a tax secret.

— Yes, in addition to the unified registers of legal entities and individual entrepreneurs, there are information databases containing information about persons in respect of whom the fact of impossibility of participation in the organization has been established in court; about persons who do not submit reports, persons with mass founders, mass managers, as well as a register of disqualified persons. On the website of the Federal Tax Service of Russia there is a service available to everyone: “Business risks: check yourself and your counterparty.”

You know that since last year, information about the size of the organization, debt, information about taxes paid, income, and expenses has not been a tax secret. Amendments to the Tax Code of the Russian Federation on expanding information that does not constitute a tax secret were adopted for taxpayers to help when choosing counterparties. This year, the Federal Tax Service has been developing a special service and a procedure for posting such information on our website. From July 25, 2017, basic data on all legal entities in Russia will be open. The existence of such an open resource will be an important tool in the implementation of the new law on abuse. Taxpayers, before completing a transaction, will have the opportunity to collect sufficient information about their counterparty in order to conduct a legal due diligence and determine the possibility of fulfilling obligations under the contract.

— How would you comment on the assessment of some tax consultants who believe that the law gives the tax authorities new powers?

“Such statements are completely false. The law prohibits taxpayers from recording for tax purposes transactions and transactions that fall under the “criteria of depravity” established by the new provisions. These are operations and transactions with the main purpose of tax evasion, as well as unrealistic transactions. At the same time, it is stipulated that such facts are proven by tax authorities only during tax audits. Thus, the principle of presumption of good faith of the taxpayer, the procedure for proving by tax authorities the fact of committing an offense and the procedure for appealing such decisions are observed. Thus, we are not talking about granting the tax authorities new broad powers; the new rules relate to establishing facts of abuse within the framework of already existing tax control procedures.

— Will the adoption of norms on tax abuses in the Tax Code of the Russian Federation lead to a wave of radically new law enforcement practice?

— The essence of the doctrine of unjustified tax benefit and the provisions prohibiting tax abuse is the same. This is a denial of tax preferences (expenses, deductions) in the event that the taxpayer commits dishonest actions aimed at reducing his tax obligations and the absence of reality of transactions (operations). The practice of proving such actions has been established and does not cause controversy or misunderstanding among tax authorities and taxpayers. Moreover, even before the law was issued, in March of this year, the Federal Tax Service communicated to the territorial tax authorities a unified position on disputes related to proving the circumstances of obtaining an unjustified tax benefit, in which it directed to abandon the formal approach, be guided by the principle of priority of substance over form and prove exactly unreality of operations. The position of the Federal Tax Service is that formal complaints against suppliers in the absence of facts disproving the reality of the transaction do not indicate abuse. That is why it can be argued that, despite the emergence of new norms that will objectively entail new judicial practice, it will not come as a surprise to taxpayers, tax authorities and courts.

— Was the bill discussed, among other things, with the participation of leading tax experts and representatives of large businesses? Were there any difficulties in finalizing the bill?

— The preparation of this bill took more than three years. At the meetings of the expert council under the State Duma Committee on Budget and Taxes, business representatives expressed their concerns and suggestions. For its part, the Federal Tax Service has repeatedly held meetings with representatives of leading legal and consulting companies, business and the scientific community. The main complaint of the business was: to exclude the possibility of refusing expenses and deductions for unidentified and unauthorized persons. After long discussions, we agreed that it was necessary to prove only the fact that the transaction was unrealistic by the counterparty stated in the documents. The bill introduced provisions according to which formal claims against counterparties (questions of officials, violation of the law by counterparties, etc.) are not an independent basis for refusal to take into account expenses and claim deductions for transactions. It was difficult but productive work.

— Will the Federal Tax Service provide territorial tax authorities with clarifications on the application of the new provisions?

— Yes, the Federal Tax Service of Russia plans to prepare and communicate to the territorial bodies the position of the legislator in order to achieve uniformity in the application of rules on abuse.

— How do you assess whether the adoption of the law will lead to an increase in disputes regarding abuses?

“We still believe that these issues will not be widespread. In recent years there has been a major transition from quantity to quality. The main issues that are currently being addressed in tax audits and which are a priority are cases of taxpayers using deliberate tax schemes using interdependent and controlled companies, as well as cases of abuse within the framework of the application of international agreements.

In addition, every year the number of inspections decreases by about 30%. Unfounded claims from tax authorities are removed at the stage of pre-trial appeal. The effectiveness of the system of “internal reviews” of their own decisions is noted by both tax consultants and the business community. Over the years of introducing the mechanism for pre-trial settlement of tax disputes, the number of complaints has decreased by one third. Over the past seven years, we have reduced litigation almost tenfold. Currently, only about 10 thousand court cases are considered per year, and this corresponds to the level of bringing disputes to the courts in the most developed countries. The high efficiency of the judicial work of the Federal Tax Service of Russia is connected with this. And we are not going to deviate from the trend of reducing disputes, since this is not in our interests.

The consolidation of rules on abuse in the Tax Code eliminated a long-standing gap in the legislation. Such harmonization will lead to certainty in assessing the integrity of taxpayers’ actions.

We must take into account that the main goal of this law is not additional additional charges, but the creation of a fair business environment and the exclusion of unfair competition.

Colleagues, what do you think? Will the new procedures be beneficial? Or will people finally lose interest in entrepreneurship? I'm leaning towards the second one.

The vice-chairman hands over the cases

The Russian market will be cleared of fly-by-night companies

Business partners will be able to receive guaranteed verified information about each other. And the risk of running into a shell company or fictitious company will become significantly less. This means that consumers will have less reason to worry that their order will not be fulfilled or that a low-quality product will be sold.

From the moment of publication and in the second stage from January 2016, amendments to several laws relating to state registration of legal entities and individual entrepreneurs will come into force. Most of the changes concern the Federal Tax Service. Deputy Head of the Federal Tax Service Sergei Arakelov told RG about this.

Sergey Ashotovich, why were the changes needed? Since 2013, the law has already obligated us to check company data; you can even object to their registration if errors are found.

Sergey Arakelov: A legal business wants to be sure of the true existence of its counterparties, that they will not disappear as soon as obligations need to be fulfilled. And receive real information about the actual state of the legal entity. Fictitious companies do not contribute to the investment attractiveness of our economy. Often it is the opacity of corporate structures and the presence of shadow companies that discourage foreign businesses from operating in our markets.

With the help of such companies, unscrupulous persons can easily escape their obligations, deceiving business partners and the state. As a result, those who use fraudulent schemes receive unreasonable competitive advantages over conscientious businessmen. This cannot be allowed.

Yes, the Civil Code in 2013 established a rule on verifying the accuracy of register information, but it remained mostly declarative. No verification procedure is prescribed by law.

It remained unclear how and in what way to qualitatively verify the accuracy of the information submitted to the tax authority, if only five days were allotted for registering documents. What to do if false data is identified after making an entry in public registers: the Unified State Register of Legal Entities and the Unified State Register of Individual Entrepreneurs? The law answers all these questions, specifies how the authenticity check should be carried out and what its consequences are. A new rule has also been introduced that allows registers to be supplemented with entries about the unreliability of certain information.

Will this become another bureaucratic procedure that interferes with business?

Sergey Arakelov: No. It won't. Conscientious businessmen today are hampered by false information in the public register. This situation is beneficial only to scammers. There is no talk at all about any obstacles to running a legal business. And an entry about unreliability is excluded from the register immediately after the correct information is entered.

For those who simply “forgot” to enter them by mistake or carelessness, the tax authority will first remind you of this. And it will be possible to provide correct data within a month from the date of issuing notifications of inaccuracy. If someone does not agree with an entry about unreliability already entered into the register, they can always file a complaint with a higher tax authority before the court.

In what cases is the Federal Tax Service now obliged to conduct an “inspection” of information before registration?

Sergey Arakelov: Firstly, if there are reasonable doubts about their authenticity based on documents available to the tax authority.

Secondly, when applications are received from interested parties objecting to the upcoming state registration or changes to the charter of a legal entity, or the inclusion of information in the register.

If the tax authority determines that the data is incorrect, registration will be denied.

What sanctions threaten for falsifying information? Are they getting tougher?

Sergey Arakelov: No, we are not talking about tightening, but about differentiating responsibility and ensuring its inevitability for those guilty of falsification.

Thus, according to amendments to the Criminal Code, now a figurehead will be considered not only the one who was allegedly “deceived” by the organizers of the company, making him the “sic chairman”, but also the one who deliberately became a figurehead director. Administrative responsibility has also been streamlined. For systematic or deliberate submission of false information for registration, only disqualification of up to 3 years is now provided, which can no longer be avoided by imposing a small fine.

New grounds have been added for refusal of state registration. Individuals who have already abused their civil rights once - were involved in violating the law, creating or operating fictitious companies, or deliberately entered false information into registers - will be limited in creating new legal entities.

Forever?

Sergey Arakelov: The restriction will not be for life - after three years you can again conduct business through a legal entity, that is, under conditions of limited liability.

At the same time, violators are not deprived of the right to engage in entrepreneurial activity, for example, as an individual entrepreneur. That is, on the terms of personal responsibility, when you cannot simply “quit” the business and thus forget about your creditors, debts to the state and unpaid taxes.

What will you do with the information that is already in the registers? Is it possible to fight counterfeits with hindsight?

Sergey Arakelov: Yes, if inaccurate data is detected, the procedure for making a corresponding entry in the register is initiated.

Do new legislative amendments close gaps in liquidation procedures for legal entities?

Sergey Arakelov: Yes. Now creditors can be sure that they will have time to submit their claims, and the debtor will not be liquidated until the end of the trial and collection of debts from him.

This will also help the state when carrying out control measures; it will be impossible to use liquidation to evade paying taxes.

In the interests of creditors, a procedure for prior notification of an upcoming change in the location of a legal entity has also been introduced. Now, when a company not only moves to another office, but makes its location another locality, and most often a subject of the Federation, creditors or its clients find out about this in advance. This can be very important, since the location of the legal entity determines, for example, in which court it will have to be sued, as well as the jurisdiction of a number of other actions, for example, enforcement proceedings.

What other important innovations, in your opinion, have been introduced into the law?

Sergey Arakelov: The registration law now states that any interested person will be able to obtain official information from registers with an electronic signature of the registering authority free of charge. To do this, you need to go to the Federal Tax Service website and make a request for any company or individual entrepreneur you are interested in.

Together with all other information that is currently posted on nalog.ru. And this is the widest range of information - from information about mass addresses, about those who do not pay taxes, who are disqualified, to those who cannot be found at their legal address and who do not submit tax reports, you can create a complete portrait of companies or individual entrepreneurs.

How will all the expected innovations change the business climate in the country?

Sergey Arakelov: Registers of legal entities and individual entrepreneurs are the most popular federal information resource, where every citizen, if necessary, can find out who he is dealing with. Today they contain data on more than 8 million legal entities and individual entrepreneurs.

Maximum publicity of registers is the key to moving towards healthy civil relations and trust in the business environment.

The state is making these efforts as part of the general direction to improve and simplify the conditions for doing business and the openness of registration procedures. The costs of time and money when starting a business are reduced, which is reflected in the World Bank ratings. Here, let me remind you that Russia has significantly increased its position in the area of ​​“registration of enterprises” over the past year.

Work in this direction continues. Literally on March 27, the State Duma adopted in the third reading a law that abolishes the mandatory use of seals by legal entities. Now, in order to start a business, you will not need to go through the procedure of making any stamps - this will be entirely on a voluntary basis.

When will the changes to the Register Accuracy Act come into full force?

Changes in terms of criminal and administrative liability will come into force in the near future, immediately after the publication of the law. The same as the rules against abuses in the liquidation of companies.

The bulk of the innovations will go into effect after January 1, 2016. So both business and the state will be able to prepare for such serious changes in registration rules.

The law has been signed

Yesterday the President of Russia signed amendments to the laws “On State Registration of Legal Entities and Individual Entrepreneurs”, “On Limited Liability Companies”, Fundamentals of Legislation on Notaries, the Criminal Code and the Code of Administrative Offenses.

Most of the changes relate to the registration of legal entities, which is carried out by the Federal Tax Service. For the first time, comprehensive changes have been made to all necessary legislative acts regarding abuses in the field of state registration of legal entities.

The most important effect expected by the Federal Tax Service is increasing the reliability of the register of legal entities.

Therefore, mechanisms are being introduced to protect against fraudsters and fictitious companies, and to provide maximum access to reliable information databases.

• tags:

Deputy Head of the Federal Tax Service (FTS) of the Russian Federation SERGEY ARAKELOV in an interview with Kommersant summed up the results of the program for introducing out-of-court procedures for resolving disputes with taxpayers.

— The President signed a law introducing the institution of tax monitoring in the Russian Federation. Is this the final stage in the development of conciliation procedures in the tax system?

- Yes. We had a concept for introducing pre-trial methods of resolving disputes. And now we can talk about the unique experience of implementing this project. We have introduced internal review procedures for all disputes, both tax and registration matters. We introduced a tax monitoring regime and a mechanism for settlement agreements in the tax sphere. To date, we have implemented the entire range of measures.

— What was the final goal of the changes?

— Improving the quality of administration, reducing the number of disputes and increasing certainty in the application of tax legislation. After all, a conscientious taxpayer wants to pay taxes correctly and have fewer conflicts with the tax service, but does not always know our position. Therefore, we need to tell you how to pay taxes correctly and reduce the number of disputes with taxpayers.

— Judging by the statistics, taxpayers argue with the service less than before, at least in the courts.

— In previous years, the tax service was involved in a large number of legal disputes, which were the result of not always high-quality decisions. The courts were actually overloaded with all this routine. The psychology of both the tax service and payers was this: let’s bring all disagreements to court, and let the court decide everything. Then it was decided to more actively develop conciliation procedures and introduce mechanisms for internal review of decisions. The situation began to change with the entry into force in 2009 of the law on pre-trial settlement of disputes. Initially, it applied only to decisions on desk and field inspections. It was incredibly difficult to change the psychology of our employees - to convince them not to be afraid to independently cancel the wrong decisions of the territorial tax authorities. The result is now visible: over the years, the number of complaints has decreased by a third, the number of legal disputes has halved.

— After the advent of the pre-trial procedure, many experts said that it would become a formal procedure that would only delay the trial period.

— Yes, many believed that we had created a formal mechanism that would lead nowhere, and that the outcome of the appeal would still be a trial. Large businesses said that the tax office would never cancel large assessments on its own. But since 2010-2011 we have seen high-quality and objective consideration of complaints. We overturned more than 40% of decisions of lower bodies. The service revised about 50% of accruals for large businesses. This is significant. We saw that this mechanism was working, after which we decided to extend the pre-trial settlement mechanism to all disputes. And this law has been in effect since this year.

— In addition to inspections, we have extended pre-trial appeals to actions and inactions of tax authorities. These are complaints about demands, notifications, untimely tax refunds, procedural issues, including registration of legal entities. We purposefully took on the burden of such disputes. They are simple, and it is important to quickly eliminate the violation of rights. Based on the materials of such complaints, we try to eliminate future cases of errors in each inspection.

— A large number of cancellations of decisions of territorial bodies seems to be an ambiguous indicator. It turns out that local tax officials often make mistakes?

— In any case, controversial issues arise within the system. The task of the internal review mechanism is to respond quickly to this. That is, do not take a citizen or organization to court for a long time, but quickly, if the tax authorities are wrong, reconsider the decision. The decisions we make are posted on our website. Today we are open and public. As a result of a unified approach, legal positions are unified. Thus, by review we control the quality of decisions of specific tax authorities. And if we see that we are canceling, but nothing changes in the inspection, then this is certainly a negative indicator for this territorial unit.

- Are you punishing?

- Of course, we will punish you. If we did not do this, our mechanism would not work effectively. Disciplinary sanctions are imposed, including dismissal. Moreover, we see an improvement in the quality of our work.

— What happens in the courts with your decisions?

- It is very important. There has been a major transition from quantity to quality. And court statistics confirm this. When we started the pre-trial procedure, about 40% won in court in terms of amounts. Today, about 80% of amounts disputed by taxpayers are considered in the courts in favor of the budget. The growth occurred precisely because we reviewed all issues that did not have a judicial perspective on our own. Only important methodological disputes and disputes with unscrupulous taxpayers reach the court. And it is right. You know, progressive international experience shows that in some countries the rate of disputes that reach the court is no more than 10%.

— You said about concluding settlement agreements with taxpayers?

— Yes, there were a lot of discussions about them too. In particular, about whether a government body can enter into settlement agreements with a taxpayer.

— Were you talking about the possibility of causing damage to the budget?

- Including. And not everything was clear from the point of view of law - whether such agreements were possible or not. For a long time there was a position to go through all the authorities, go to the end and in no case give in to the taxpayer. We then raised this issue before the Supreme Arbitration Court (SAC), which caused a certain furor: no one expected this from us. The Supreme Court acknowledged that settlement agreements are possible. Today we have already concluded more than 40 global agreements. They are concluded at all stages. We concluded the first at the stage of consideration of the issue by the Presidium of the Supreme Arbitration Court, followed by agreements at the stages of first instance, appeal, and cassation. If we see that there are no grounds, there is no longer any determination to go to the end.

—What kind of disputes end peacefully?

— These may be disputes of a methodological nature, disputes regarding the application of a rule, there may be situations where the practice of law enforcement has changed. In order to ensure uniform policies and practices, all settlement agreements are agreed upon at the central office level.

— One of the latest administration innovations is the inclusion of a tax monitoring mechanism in the Tax Code?

- Yes. In fact, this is a new model of interaction between tax authorities and taxpayers, which is based on the principles of openness and trust. Around the world, this approach is also called enhanced information interaction (horizontal monitoring). The point of the mechanism is that even before filing a return, the taxpayer has the opportunity to clarify all controversial issues with the tax authority regarding the taxation of transactions. That is, certainty arises; the company can actually protect itself from risks in the form of inspections. In return, it provides the tax authority with online access to its tax and accounting data.

To be honest, at first I didn’t really believe that anyone was ready to open up. I wasn't sure if it would work. Then they decided to do a pilot project: they took five companies - those that were ready for this. These are Inter RAO, RusHydro, MTS, EY and Severstal. We have been working with these companies in this mode for two years. We see that it is effective. For example, regarding one of the “five” companies, the number of disputes has decreased by five times. Over the course of the year, we responded to more than 50 requests from companies regarding tax issues and held more than 60 meetings with them. The bulk of data is in electronic form; the volume of document transmission on paper has decreased significantly. But this is not the most important thing. This is a new level of relationship with taxpayers. We work in dialogue mode, helping to minimize questions and disputes between us.

— Is the Federal Tax Service sure that it will get full access to company documentation?

— During monitoring, we constantly monitor online the reflection of data in accounting, the correctness of calculation and payment of taxes. According to the law, if a company provides false information, we can always initiate a control regime in the form of tax audits. But it seems to me that the moment of trust is very important here. If companies do not provide us with something and we later identify it, a mechanism of sanctions and further inspections will come into force. And it will be difficult to restore trust again. A serious public company is not interested in this.

— Which companies will be able to take advantage of the regime?

— The criteria for entering this regime have been established: payment of taxes of 300 million rubles. per year, revenue 3 billion rubles. and assets 3 billion rubles. In general, the law establishes a tax monitoring mechanism, as it is known in world practice. The payer draws up regulations establishing the procedure for access to its reports. At the taxpayer's request, we provide a reasoned opinion on a particular issue. Or we independently identify the topic that needs to be reflected. He, in turn, if he agrees, makes changes to the declaration. If not, the conciliation procedure comes into play. We are specially conducting it at the level of the Federal Tax Service, listening to both sides. This is an opportunity to jointly develop common legal positions. The monitoring agreement is concluded for a year, then it can be extended, and during this period tax audits, both on-site and desk-based, are not carried out.

— Are there any people now willing to join the monitoring?

— According to our estimates, a maximum of about 2 thousand payers who meet the above criteria may fall under it. It is clear that many are not yet ready for new administration methods. But we already see about 30 companies that would like to switch to this mode of interaction. We believe that there will be more companies ready for open relationships.

— When should taxpayers decide to join the new mechanism?

— Until July 2015, the payer can apply. I repeat that there was no idea to extend this mechanism to everyone; after all, tax monitoring concerns issues that are difficult to apply and is mainly intended for large businesses with a built-in internal accounting system for compliance with the law. But, on the other hand, if we see the effectiveness of the measures, the access criteria can be adjusted in the future. For example, in Holland, medium and even small businesses—several tens of thousands of companies—participate in monitoring.

— Taking into account all the new mechanisms, how is the Federal Tax Service’s approach to tax audits changing?

— We are reducing the level of tax control in relation to bona fide businesses, but increasing it in relation to unscrupulous ones. But these are not total checks. Not at all. On the contrary, every year the number of inspections decreases by about 30%. We have begun to implement a system for modeling taxpayer behavior, where companies with the highest risk areas are selected in a certain industry, and after verification, the results for companies in this industry are widely reported. This is how we create a ripple effect; companies themselves adjust their obligations. There is no need to conduct full-scale audits of the industry. When selecting taxpayers for audits, a risk-based approach is used. This means the inspector must know where he is going and who he is checking. We check taxpayers point-by-point. In particular, we are closely looking at the issues of creating schemes, including transactions through offshore companies, and obtaining unjustified tax benefits. And we control inspections from the beginning until the recovery of amounts into the budget, using all mechanisms, including recovery from dependent companies if the payer hides assets.

— Are there cases of collection of taxes from dependent companies?

— Previously, we often encountered a situation where the service carried out an audit, the decision came into force, but the payer transferred assets to another company for the purpose of non-payment of tax, effectively continuing its activities. After all, a new legal entity has been formally created, which is not responsible for the previous one. There was no mechanism to counter this in the Tax Code. A year ago, we introduced a rule that allows us to collect taxes in such a situation from dependent companies. Now the courts have supported us, the mechanism is effective, and we will apply this practice to unscrupulous companies.

— What other legislative initiatives does the Federal Tax Service have regarding unscrupulous payers?

“We have taken the initiative to enshrine in law the prohibition of taxpayers abusing their rights. By and large, the Tax Code is written for the conscientious taxpayer. When there is no “good faith”, we work within the framework of the 53rd ruling of the Supreme Arbitration Court on unjustified tax benefits. That is, when making a decision based on the results of inspections, we actually refer not to the norms of the law, but to a judicial act. Of course, the rules on abuse of law must be enshrined in legislation. These should not be step-by-step instructions on how to prove receipt of unjustified benefits, but it is necessary to establish general principles of prohibiting taxpayer abuse of rights. If a person abuses his rights, then, of course, he should be limited in the use of privileges, benefits, and preferences. Such norms exist in many foreign countries.

— That is, the Federal Tax Service has different approaches to conscientious taxpayers and unscrupulous ones?

- That's how it should be. Out-of-court mechanisms for resolving disputes, the concept of expanded interaction is a reduction in the level of control over bona fide payers. This frees up manpower so we can switch to at-risk payers. And here we must use all legal mechanisms to protect the interests of the budget.

— The program for introducing extrajudicial procedures has been completed. Does the Federal Tax Service have any other innovations planned?

— Indeed, we have implemented most of the plans regarding pre-trial procedures. But there is another topic that we plan to approach in the future—tax mediation. This is also a very difficult story - to involve in the consideration of controversial issues a person who would be trusted by both parties: the state represented by the tax authorities and the taxpayer. It is clear that it is very difficult to find an independent and professionally knowledgeable person who would be trusted by both parties. It seems to me that mediators could alternatively be retired judges or representatives of the scientific community - specialists in one field or another. The mechanism itself is interesting, used in many countries. With the help of tax mediation, you can resolve the most complex disputes that require special knowledge. But it is necessary to weigh how harmoniously this mechanism can be integrated into our tax system. In general, as our experience has shown, the introduction of alternative methods of dispute resolution is effective and leads to improved administration and a reduction in conflict.

Interview prepared by Dmitry Butrin