Rapid diagnosis
We look at the requests, the report, the documents and what has already been said in response. We separate the genuinely weak points from allegations the audit file does not support.
PRACTICE / 03
Tax disputes and defence during tax audits
From the first request for documents to the decision being quashed in court.
- Assessment overturned
- RUB 93.5 million
- Interest overturned
- RUB 26.4 million
- Instances
- All, including the Supreme Court
The outcome of a tax dispute is settled during the audit rather than in court: by which documents you handed over, what you wrote in your explanations and what your staff said in interview. Unpicking that afterwards costs more than getting it right at the outset.
We can be brought in at any stage — from the first request for documents to cassation. In one matter we had a decision quashed that had assessed RUB 93.5 million of tax arrears and RUB 26.4 million of late-payment interest, and the administrative proceedings were discontinued.
What we do
- Support field and desk tax audits: responses to requests, written explanations, preparing staff for interview, attendance at inspections and seizures.
- Support police inspections and measures relating to economic offences — together with the advocates of the Kovalev, Malyutov, Tsypkalo & Partners Moscow Bar Association.
- Prepare objections to the audit report and appeals to the superior tax authority.
- Challenge assessment decisions before the arbitrazh courts at every level.
- Provide tax advisory work: testing the structure of transactions and of the group for tax risk before the Federal Tax Service does.
- Challenge acts and omissions of state bodies and officials, including refusals, orders and unlawful inspections.
- Handle antimonopoly matters: support during inspections by the Federal Antimonopoly Service, defence in competition proceedings, challenges to orders.
- Lift account freezes and interim measures imposed by the tax authority.
Typical situations
- The inspectorate has treated transactions with a counterparty or intra-group loans as artificial and disallowed the costs and deductions.
- An audit report with an additional assessment has arrived and there is a month left to file objections.
- Staff are being called for interview and inspectors have arrived at the company — and it is unclear what is and is not permitted.
- The bank account is frozen, the business has stopped and no reason for the freeze has been given.
- A state body has refused an approval, issued an order or simply failed to act, while the business is up against its own deadlines.
Commercial disputes in Russia are heard by the arbitrazh courts — the state commercial courts, not private arbitration tribunals; disputes involving individuals go to the courts of general jurisdiction.
HOW THE WORK IS ORGANISED
How the work is organised
Position and evidence
We assemble what proves the business purpose and the reality of the operations: the economics of the transactions, payments, correspondence, industry data. In parallel we record procedural breaches by the inspectors — sometimes a free-standing ground for quashing the decision.
Pre-litigation stage
Objections to the report and an appeal to the superior tax authority. Part of the sum often comes off at this stage — faster and cheaper than litigation.
Court
An application to set aside the decision, interim relief so the assessed amount is not collected while the dispute runs, and conduct of the case until judgment takes effect.
RESULTS
Cases from this practice
Tax disputes2024
RUB 93.5million of tax assessment overturned
Tax assessment and interest overturned after a field tax audit
Following a field audit, VK-I was assessed RUB 93.5 million of arrears and RUB 26.4 million of interest, with administrative proceedings opened under art. 122(3) of the Tax Code: the tax authority treated loans from a foreign company as artificial. We proved the economic purpose of the loans, that they were actually serviced, and that the audit itself was procedurally flawed. The decision was quashed and the proceedings discontinued.
Read the case
Debt recovery and commercial litigation2024
RUB 3.06billion in principal debt claimed
Otkrytye Tekhnologii claims against Sibantracit group companies
We act for Otkrytye Tekhnologii LLC in claims against Razrez Kiyzassky LLC and Razrez Vostochny LLC for RUB 3.06 billion and RUB 1.29 billion respectively. The customers stopped advance payments, refused to sign completion certificates and closed access to the sites, while the results of the work are in use. The cases are before the Arbitrazh Court of the Republic of Mari El.
Read the case
M&A and corporate law2024
49,000sq m within the transaction perimeter
M&A support: Amba supermarkets to X5 Group
We advised on X5 Group's acquisition of the Amba supermarket chain in Khabarovsk Territory: long-term lease rights over sites totalling more than 49,000 sq m, and their relaunch under the Pyaterochka brand in Khabarovsk, Komsomolsk-on-Amur and 14 district centres. The territory became the chain's 69th region of operation.
Read the case
QUESTIONS
Frequently asked questions
At what stage of an audit should a lawyer be brought in?
At the first request for documents. What you hand to the inspectorate and write in your explanations becomes the basis of the audit report. We can join later — right up to cassation — but re-playing what has already been said costs more than building the position from the start.
How long is there to object to an audit report?
One month from the day the report is received. That is enough if you start immediately: a week goes on reviewing the file, the rest on assembling evidence of business purpose and of the reality of the operations.
Do we have to go to court, or can the dispute be settled with the tax authority?
A pre-litigation appeal to the superior tax authority is compulsory, and part of the assessment often comes off there — faster and cheaper than litigation. We go to court with whatever survives that stage.
What should we do if staff are called for interview?
Prepare in advance: go through the facts, explain the rights and the procedure, and attend with a representative. Evidence given off the cuff is the single most common piece of evidence used against a company in disputes about artificial transactions.
Can we withhold payment of the assessment while the dispute runs?
Collection can be stopped by interim relief from the court, which we apply for at the same time as the application to set aside the decision. The court does not always grant it, so we prepare a fallback plan at the same time.
PRACTICE SERVICES
Individual services
01 / SERVICE
Support during field and desk tax audits
The audit is under way or about to start, and every letter to the tax office becomes evidence.
02 / SERVICE
Appealing a tax authority decision
You have an audit report, or already a decision assessing additional tax, late-payment interest and a fine.
03 / SERVICE
Responding to a tax authority request
The request arrived through the electronic reporting channel, the deadline is short and the wording is vague.
04 / SERVICE
Business splitting and unjustified tax benefit claims
The tax office treats several companies and sole traders as a single taxpayer and recalculates their taxes under the general regime.
05 / SERVICE
VAT refunds
A VAT return showing a refund almost always means an in-depth desk audit, requests running down the whole supply chain and interviews.
06 / SERVICE
Currency control
Cross-border payments now run through new intermediaries and new currencies, while banks and the tax authorities scrutinise them more closely.
NEXT STEP
Let us look at your situation
The consultation is free when an engagement is signed: we tell you whether the matter has prospects and roughly what running it will cost.