NEW BUDGET CLASSIFICATION CODES FOR TAX AND ADMINISTRATIVE FINES
The following codes were introduced effective from 01 January 2020:
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For fines under Part 1 of the Tax Code (broken down by type of violations);
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For administrative fines for delay of returns, failure to furnish information to the Inspectorate of the Federal Tax Service, and other violations in the area of finance, taxes, and levies, breach of the state registration legislation, illegal sales of goods, failure to use cash register equipment, etc.
The new budget classification codes must be used irrespective of the period in which the payment falls.
Order No. 86n of the Ministry of Finance dated 06 June 2019
CHANGES IN THE TAX DEBT ENFORCEMENT PROCEDURE
Starting 01 April 2020:
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If the amount to be enforced exceeds RUB 3,000, the enforcement decision shall be made within two months from the date when the said amount exceeds RUB 3,000.
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If the amount to be enforced does NOT exceed RUB 3,000, the enforcement decision shall be made within two months upon expiry of the three-year period referred to above.
Clause 11, Article 1 of Law No. 325-FZ dated 29 September 2019
CHANGES IN ACCOUNT FREEZE PROCEDURES
Starting 01 April 2020:
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The Inspectorate of the Federal Tax Service may not freeze legal entities’ and individuals’ accounts until the debt to the budget exceeds RUB 3,000;
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Until 01 April 2020, the Inspectorate of the Federal Tax Service may freeze accounts notwithstanding the debt amount, and the debt enforcement decision applies irrespective of the amount within a two-month period.
Clause 11, Article 1 of Law No. 325-FZ dated 29 September 2019
ADDITIONAL MEASURES APPLIED BY THE INSPECTORATE OF THE FEDERAL TAX SERVICE TO ENFORCE MAJOR DEBTS
Starting 01 April 2020, the Inspectorate of the Federal Tax Service may apply additional measures to enforce tax arrears exceeding RUB 1,000,000.
If the collection bank fails to write off the debt within 10 days, tax inspectors may:
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Inspect the entity’s grounds, premises, documents, and items, but not more than once under a single decision and with the entity’s consent;
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Request and obtain documents and information on the property, property rights, and liabilities beyond the scope of the inspection. If the entity fails to furnish this information voluntarily, the Inspectorate of the Federal Tax Service may request this information from third parties.
Prior to 01 April 2020, the Inspectorate of the Federal Tax Service did not enjoy such powers.
Clause 32, Article 1 and Clause 33, Article 1 of Law No. 325-FZ dated 29 September 2019
CANCELLATION OF THE BAN TO SET OFF OVERPAID TAXES AGAINST VARIOUS TYPES OF TAXES
Starting 01 October 2020, federal, regional, and local taxes may be set off.
Overpayments may now be set off against future payments or against tax arrears.
A refund may be collected after paying all arrears in taxes and levies in full.
Sub-clauses «a», «b», «g», Clause 22, Paragraph 3, Sub-clause «f», Clause 22, Article 1 of Federal Law No. 325-FZ dated 29 September 2019
CHANGES IN LEGAL PRECEDENTS
If a tax authority reveals that:
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no economic source of VAT deduction (refund) has been created;
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the supplier (contractor) had no economic (material, financial, labor, etc.) resources to perform the agreement made when working with the buyer;
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the transaction has actually been performed by third parties that were not entitled to be assigned the relevant performance obligation by the supplier due to the fact that the latter served as a straw party.
These circumstances may indicate that the taxpayer has failed to use due circumspection when choosing the counterparty until proven otherwise.
By contrast, the following circumstances provide the buying taxpayer acting reasonably with valid grounds to expect that the counterparty will duly perform the transaction and the taxes associated with this transaction will be duly paid to the budget:
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Entry into an agreement with a business entity that possesses sufficient economic resources to perform the transaction, either by using its own resources or by engaging third parties;
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Provision of financial statements and tax returns disclosing the availability of the relevant assets thereby.
In this case, the choice of the counterparty shall be deemed to be in compliance with the business practices until proven otherwise by the tax authority.
Resolution No. 307-ES19-27597 of the Chamber for Commercial Disputes of the Supreme Court of the Russian Federation dated 14 May 2020 in Case No. A42-7695/2017
