VAT Refund Cases
Legal support of value added tax refund cases
The taxation system includes various types of taxes, including value added tax, which belongs to federal types of taxes. VAT is the amount that an entrepreneur must transfer to the budget, while it is included in the cost of goods, works, services. At the same time, the tax legislation provides for a VAT refund procedure, which is regulated by Article 176 of the Tax Code of the Russian Federation. Despite the fact that the sequence of actions for value added tax refunds is understandable and clearly provided for by the legislation of the Russian Federation, consideration of VAT refund cases is one of the most considered categories of tax cases.
VAT refund is the right of taxpayers, which businesses actively use, while it should be noted that an important condition for its implementation is a desk audit of the tax authority. Reimbursement of VAT is carried out in extrajudicial and judicial procedures.
Extrajudicial value added tax refund procedure is implemented in two ways:
- Tax refund is carried out based on the results of a desk audit;
- In this case, the offset (refund) of the amount of tax declared for reimbursement in the tax return is carried out until the completion of the ongoing in-house tax audit.
The following persons have the right to apply the declarative tax refund procedure:
- organizations whose total amount of value added tax, excises, corporate income tax and mineral extraction tax paid over 3 calendar years is at least 2 billion rubles;
- recipients of a bank guarantee;
- residents of the territory of rapid socio-economic development;
- residents of the free port of Vladivostok;
- taxpayers whose obligation to pay tax is secured by a surety;
- taxpayers subject to tax monitoring;
- organizations that produce a vaccine for the prevention of a new coronavirus infection and information about which is contained in the registration certificate of such a vaccine;
- taxpayers who meet the following requirements: (a) the taxpayer is not in the process of reorganization or liquidation; (b) no insolvency (bankruptcy) proceedings have been initiated against the taxpayer in accordance with the insolvency (bankruptcy) legislation of the Russian Federation.
However, despite the regulated procedure for exercising the right to a VAT refund, such cases often reach the court and are resolved only by its decision. In court, as a rule, decisions of the tax authorities made on the basis of the results of desk audits are appealed, the entrepreneur, not agreeing with the decision made, goes to court.
In order to receive VAT refunds, entrepreneurs need to carefully prepare a set of documents specified by law, this is due to the fact that the tax authorities, during a desk audit, scrupulously study the submitted documents in order to minimize the issuance of decisions on VAT refunds. It is also important to note that when a decision is made to refuse VAT refunds, as a rule, a decision is made to bring to tax liability (to refuse to hold liable).
Before resolving in court, it is necessary to appeal the decision of the tax authority, the right to appeal is enshrined in Article 137 of the Tax Code of the Russian Federation. At the same time, a complaint is submitted to a higher tax authority through a tax authority whose non-normative acts, actions or inaction of officials of which are appealed. The procedure and terms of appeal are regulated by Article 139 of the Tax Code of the Russian Federation. At the same time, the norms of the Tax Code of the Russian Federation also provide for an appeal against a decision to prosecute for committing a tax offense or a decision to refuse to prosecute for committing a tax offense, which is filed through the tax authority that issued the relevant decision. Based on the results of consideration of the complaint, the tax authority makes a decision, in case of disagreement with which, the applicant has the right to apply for the protection of his interests to the judicial authorities. Meanwhile, when considering VAT refund cases in the courts, as a rule, the applicant can refer only to those documents that were provided for a desk audit by the tax authority.
A positive decision in VAT refund cases, as a rule, depends on several factors:
- competent accounting and financial documentation in general;
- preparation of documents for reimbursement in accordance with the requirements of tax legislation;
- proper handling of value added tax refund cases, both when interacting with tax authorities and when resolving a dispute in court.
At the same time, the accounting of an organization by an experienced specialist with not only theoretical but also practical knowledge allows solving tax cases, including value added tax refunds, with a positive result. Increasingly, the business community uses the services of outsourcing accounting and legal services and transfers the conduct of their business in this industry to competent and experienced professionals, whose participation allows entrepreneurs to save time on accounting and legal support, while minimizing possible risks.
- Advising clients on value added tax refund issues
- Analysis of business activities for the possibility of VAT refunds
- Support of business activities on taxation issues
- Preparation and submission of documents for VAT refunds to the tax authorities, and, if necessary, to the court
- Representation in tax and judicial authorities in VAT refund cases