Tax Dispute Resolution Practice

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The Russian tax authorities aren't always focused on impartially examining each taxpayer. On the contrary, the tax authorities are often looking to charge additional tax to the companies. In most cases, the audits result in additional taxes being charged to companies and taxpayers frequently need to dispute the authorities' decisions.

PwC Legal's Tax Dispute Resolution practice comprises leading Russian tax lawyers proficient in all areas of pre-trial and judicial tax dispute resolution and draws on the expert knowledge of the world's leading tax consultants.

For over a decade we've assisted in preventing possible challenges from tax authorities and successfully defended our clients during pre-trial and all other stages of the judicial process.

What makes us different from others

  • Thanks to having an effective strategy in place for settling tax disputes, we have won over 98% of our court cases
  • Last year we supported over 50 tax audits and successfully settled over 40 complex tax disputes
  • We enjoy the support of, and cooperate with, over 400 tax consultants located in Russia.
  • We are part of PwC's Tax Controversy and Dispute Resolution (TCDR) Network which includes PwC tax dispute resolution specialists from different countries (USA, UK, Canada, India, China and others).
  • We monitor global tax dispute trends even before they arise in Russia.
  • Being a global network, we have up-to-date information available on numerous tax risks and issues arising in various industries as well as the latest solutions.
  • Our company is subdivided onto specialised groups (indirect taxation, transfer pricing etc.) and industry practices.
  • PwC Legal is recommended by the leading international and Russian ratings agencies - Legal 500, PLC Which Lawyer and Pravo.ru (in association with Vedomosti newspaper).

Our services

  • Legal review of tax authorities' conduct and resolutions
  • Support of desk and field tax audits
  • Drafting objections to acts, complaints related to resolutions based on results of tax audits
  • Pre-trial support during disputes with tax authorities
  • Representing clients in all judicial instances
  • Drafting of amicable agreements
  • Drafting of agreements establishing consolidated groups of taxpayers
  • Drafting of advance pricing agreements (APAs)
  • Support of mutual agreement procedures (MAPs)

Our experience

Illustrative experience of pre-trial settlement of tax disputes:

  • Representing a gas upstream and downstream industry leader during the pre-trial settlement of a dispute regarding management expenses. As a result of legal advice provided during the pre-trial stage, the tax authorities recognised the company's viewpoint stated in the objection in full and withdrew all claims, which amounted to over 90,000,000 roubles.
  • Representing a large consumer electronics manufacturer during a field tax audit. Our accurately structured strategy for interacting with the tax authorities allowed the company to dismiss the tax authorities' claims pertaining to the company's suppliers in the amount of over 30,000,000 roubles at the objection stage .
  • Supporting a famous pharmaceutical company during a field tax audit. The efforts of our team prompted the tax authorities to exclude reclassification of services provided by the company from the audit report, which would otherwise have resulted in VAT obligations.
  • Supporting the world's largest manufacturer of non-alcoholic beverages during the pre-trial settlement of a dispute regarding cost accounting in a subsequent tax period. The strategy we developed for settling this dispute permitted the client to defend their position in full and save over 50,000,000 roubles.
  • Representing an international architectural company during pre-trial settlement of a dispute. Following our services, the higher tax authority upheld the company's position to allow distribution of income between the head company and its Russian representative office.
  • Supporting a large equipment manufacturer during pre-trial settlement of a dispute. During the tax audit, the tax authorities challenged the accuracy of pricing and charged additional profit tax and VAT. The efforts of our team allowed the company to defend its position during the pre-trial stage.

Illustrative experience of in-court settlement of tax disputes:

  • Assisting an international household appliances and electronics manufacturer in analysing the field tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolution. The tax dispute involved multiple counts, including the validity of including manual adjustments in the price of manufactured and purchased products as expenses, accounting for profit tax expenses in a subsequent tax period, accounting for expenses related to advertisement of a "foreign" trademark and corresponding VAT deduction, etc. The total amount of claims made by the tax authorities attempting to charge additional tax and/or penalties and tax sanctions, which were ultimately invalidated in court, was over 350,000,000 roubles.
  • Assisting one of the largest Russian banks in analysing the field tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolution. The matter involved the possibility of accounting for losses incurred through derivatives. The total amount of claims made by the tax authorities attempting to collect additional tax and/or penalties and tax sanctions, which were later invalidated by court, was over 520,000,000 roubles.
  • Defending several car dealers in disputes with tax authorities on applying the 5% VAT barrier. After considering the disputes, the courts upheld the auto dealers' conduct as lawaful. Settling these disputes also had a great impact on the automotive industry in general.
  • Supporting one of Russia's largest gas exporters in analysing the field tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolution. The matter revolved around whether sum differences resulting from agency transactions should be accounted for as expenses. The total amount of claims made by the tax authorities attempting to collect additional tax and/or penalties and tax sanctions, that were ultimately invalidated by the court, was over 120,000,000 roubles.
  • Assisting an international pharmaceutical company in analysing the field tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolution. The dispute concerned the nature of the company's services for VAT purposes. The total amount of claims made by the tax authorities attempting to collect additional tax and/or penalties and tax sanctions that were ultimately invalidated by the court was over 50,000,000 roubles.
  • Assisting a Russian oil company in analysing the desk tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolutions. The dispute concerned whether it was possible to deduct VAT after expiry of a three-year statute of limitations, as well as to deduct VAT related to a geological survey in the absence of a license. The total amount of claims made by the tax authorities attempting to collect additional tax and/or penalties and tax sanctions that were invalidated by the court was over 90,000,000 roubles.
  • Assisting a large equipment manufacturer in analysing the field tax audit report and representing it in arbitrazh courts of third instance during appeal of the tax authorities' resolution. The dispute concerned the applicability of a 0% VAT rate to processing services in the absence of proper agreements. The total amount of claims made by the tax authorities attempting to collect additional tax and/or penalties and tax sanctions that were subsequently invalidated by the court was over 23,000,000 roubles.
  • Defending interests of an international producer of non-alcoholic beverages on deducting expenses incurred for commercials it produced. Our team represented the company at all stages of the tax dispute. As a result, the courts of third instance upheld the company’s one-off deduction of expenses related to production of commercials.

Illustrative experience of advising on CTG creation:

  • Drafting CTG agreements for Russia's largest companies. Advising on establishment and operation of CTGs, supporting CTG activity jointly with specialists from PwC's tax department.
 
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