Paid Excess Taxes? We Will Tell You How to Get a Refund-Publication

By Irina Anoshina, Head of Accounting Department, BDO Unicon Outsourcing

The primary objective is to make things simple for business. From now on, companies will not have to take legal action immediately which will provide major time savings. The period for appeal has also been changed.

WHAT ARE THE CHANGES?

One of the positive changes is that from now on, companies and entrepreneurs will have three years to appeal. In the past, taxpayers had just one month to file a refund application for excess taxes. The Tax Service has issued a letter with clarifications guiding taxpayers through the tax refund process. In the past, taxpayers could get a tax refund both upon application and through the courts under Article 79 of the Tax Code. Amendments to Article 79 of the Tax Code came in force on 14 December. The process of getting a refund for excess taxes, insurance payments, fines, charges, or late fees has been made subject to an out-of-court procedure, and therefore, simplified. To get a refund of excess taxes, you need to draw up an application and address it to a tax authority. The form of the application has been approved by Order of the Federal Tax Service No. MMV-7-8/182@ dated 14.02.2017.

WHAT DO YOU NEED TO DO NOW TO RECOVER MONEY?

You cannot file a claim straight away in the court now. The first thing you need to do is to contact the tax agents. If they reject your application, their decision can be appealed in the regional branch of the Federal Tax Service by filing a complaint through your local office. Specify that you disagree with the rejection and provide reasons in your complaint. For instance, the tax agents referred to a wrong period or miscalculated the tax amount. If your tax refund application is still rejected or disregarded, you can appeal against the decision in court. A company will have three months to do that. After the publication of the amendments, it is Article 139 of the Tax Code that provides grounds for the appeal rather than Article 79. Article 139 stipulates that a taxpayer may appeal against a tax authority’s decision if its excess tax refund application is rejected.

A taxpayer may also be entitled to an interest as a compensation alongside with the refund. If you succeed in proving that excess taxes, fines, or insurance payments were withheld, you will receive the amount of the interest accrued as per Article 79 of the Tax Code on top of the refund. Interest will be accrued starting from the date following the collection date and up to the date of actual refund. The interest rate shall be equal to the discount rate of the Central Bank on the interest accrual dates. Excess taxes withheld from a company will now be refunded on the same date with normal overpayment. This is a positive change: the application submission deadline has been extended and the refund procedure has been simplified. The key is to remember that you won’t be able to get a refund in case of back taxes, fines, or insurance payments.

Sources:

Federal Law No. 322-FZ dated 14.11.2017 “On the Amendments to Articles 78 and 79, Part I of the Tax Code of the Russian Federation”
Letter of the Federal Tax Service No. GD-4-11/26058 dated 21.12.2017 “On the Procedure for the Application of the Investment Tax Deduction under the Personal Income Tax.”