In the new issue of the magazine "Nalogoved" № 8 (August 2017)there was published an article of the CEO of the National Law Company "Mitra" Yury Mirzoev.
In this article, Yury paid attention to the possibility of bringing to responsibility of taxpayers for unjustified compensation of the tax, as well as the application of the fine under Art. 122 of the Tax Code.
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The Constitutional Court of the Russian Federation doesn`t exclude the possibility of bringing taxpayers to account for unreasonable tax refund. However, even taking into account his legal position, there were questions that didn`t allow to bring law enforcement practice to uniformity.
The practice of tax authorities to prosecute under Art. 122 of the Tax Code of the Russian Federation, for excessive tax refund has long been formed not in favor of taxpayers. Previously, courts in most cases proceeded from the fact that the norms of tax legislation do not give grounds to state quite definitely that illegal payment of tax should be considered as its non-payment. And so, although they recognized, guided by the position of the Presidium of the Supreme Arbitration Court of the Russian Federation2, excessively compensated tax amounts arrears, they considered that it should not qualify under para. 1, Art. 122 of the Tax Code.
On 28th of August 2013, there was put into effect 4 p. 8 of Art. 101 of the Tax Code. This rule directly establishes that the amount of tax, that is excessively recovered on the basis of the decision of the tax authority, is tax arrears from the date of the actual receipt by the taxpayer of the funds (in the case of a refund of the tax amount) or from the date of the decision on the offset of the amount of tax claimed for compensation tax). After the introduction of this rule, the courts had doubts about the inadmissibility of bringing taxpayers to account for excessive compensation of taxes under art. 122 of the Tax Code.
Different approaches of arbitration courts
Many different approaches of arbitration practice to the resolution of disputes, linked with the application of p. 4 p. 8 of Art. 101 and art. 122 of the Tax Code, make the result of the proceedings unpredictable. Because of the inability to predict the consequences of their actions (inaction), taxpayers are in a state of legal uncertainty.
In particular, the Arbitration Court of Volga District expressed the position that the charging fine as a measure of responsibility for the non-return of an excessively compensated tax under art. 122 of the Tax Code is not provided.
In fact, the sixteenth Arbitration Appeals Court overruled the "pro-budget" approach. Abrogating the decision of the court of first instance, he pointed out that the stipulated p. 4 p. 8 of Art. 101 of the Tax Code of the Russian Federation, arrears are treated as an unpaid amount of tax, which is an element of the objective side of the tax offense established in p.1 art. 122 of the Tax Code. In this regard, the taxpayer's involvement in the liability under Art. 122 of the Tax Code is recognized by the court as lawful.
The position on the admissibility of bringing a taxpayer to account under Section 1, Art. 122 of the Tax Code of the Russian Federation for unreasonable compensation of VAT is formulated in the Recommendations of the Scientific Advisory Board under the Arbitration Court of the North Caucasus District. The amount of tax, which is excessively compensated on the basis of the decision of the tax authority, is recognized as a deficit (paragraph 4 of clause 8 of Article 101 of the Tax Code of the Russian Federation), which is defined as the amount of tax or duty not paid within the time period established by tax legislation (clause 2 of Article 11 of the Tax Code). Proceeding from this, the Scientific Advisory Council concluded that an unreasonable refund of VAT from the moment of enactment of p. 4 p. 8 of Art. 101 of the Tax Code of the Russian Federation is permissible to qualify under item 1 of Art. 122 of the Tax Code as non-payment or incomplete payment of the amount of tax(fee) as a result of understatement of the tax base, other incorrect calculation of tax (fee) or other illegal actions (inaction). At the same time, arrears, formed as a result of illegal reimbursement before the specified moment, are not subject to qualification under p. 1, Art. 122 of the Tax Code.
Of the problem mentioned, there are still questions. For example, whether the following are applicable. 4 p. 8 of Art. 101 and art. 122 of the Tax Code of the Russian Federation in the case of a declarative procedure for refunding VAT, while Art. 176.1 of the Code already provides for the payment of double interest.
Thus, in the case of OJSC “Donskoy Tabak” (No. A40-75563 / 2016), courts of three instances concluded that the interest under clauses 7 and 17 of Art. 176.1 of the Tax Code of the Russian Federation, is a method of ensuring payment of a tax that is excessively compensated in a declarative procedure and compensation for budget losses when these funds are paid. The courts rejected the taxpayer's argument about the inadmissibility of paying increased interest and bringing to account under Art. 122 of the Tax Code of the Russian Federation in the form of a fine for the same fact of violation of the declared order of tax refund.
Position of the Constitutional Court of the Russian Federation
The opportunity to establish the constitutional-legal meaning of p. 4 p. 8 of Art. 101 of the Tax Code of the Russian Federation and introduce uniformity in the practice of applying this norm and the norms of Art. 122 of the Tax Code of the Russian Federation appeared at the Constitutional Court of the Russian Federation when considering the complaint of LLC "Chebarkul Bird". However, from the analysis of the issued Decision No. 571-O of 10 March 2016 (hereinafter referred to as the Definition) it follows that the Court did not take full advantage of this opportunity.
On the question of the admissibility of collecting penalties from a taxpayer, whose claim for reimbursement of tax amounts proved subsequently unreasonable, the Constitutional Court of the Russian Federation replied in the affirmative and unequivocal, although indisputably: the decision of the tax authority on reimbursement of the tax can be qualified as a written explanation of the procedure for calculating, paying taxes or on other issues of application of the legislation on taxes and fees, which, by virtue of clause 8, Article. 75 of the Tax Code excludes the imposition of penalties on the amount of arrears.
At the same time, the position on the legality of imposing a fine for unreasonable tax refund is very vague.
Pointing out that the norms on public responsibility are subject to application in according with their literal sense, excluding the broad interpretation of the objective side of the imputed offense, the Constitutional Court noted that the objective side of Art. 122 of the Tax Code of the Russian Federation, the offense forms a non-payment or incomplete payment of the tax (levy) as a result of illegal actions (inaction) of the taxpayer.
These arguments lead to the idea that, in the opinion of the Constitutional Court of the Russian Federation, unreasonable tax refund is not a ground for attracting a taxpayer to liability under art. 122 of the Tax Code. As excessive compensation is not evidence of non-payment or incomplete payment of the tax, stipulated by Art. 122 of the Tax Code of the Russian Federation, the sanction can`t be applied to a taxpayer, whose claim for compensation was unreasonable.
Such a conclusion would be justified if the Constitutional Court of the Russian Federation was limited to the rules of interpretation and application of norms on public responsibility. But further in the Definition it is indicated that the taxpayer's involvement in tax liability, including liability under Art. 122 of the Tax Code, it is permissible, only if the composition of the offense and the fault of the taxpayer as its integral element are established. On this basis, the Court concludes that p. 4 p. 8 of Art. 101 of the Tax Code of the Russian Federation, which recognizes amounts of tax excessively reimbursed on the basis of a decision of the tax authority, arrears, doesn`t predetermine the involvement of the taxpayer in responsibility for committing an offense, and therefore can`t be considered as violating constitutional rights.
Thus, the Constitutional Court of the Russian Federation doesnt exclude the possibility of bringing the taxpayer accountable under Art. 122 of the Tax Code of the Russian Federation in case of an unreasonable tax refund, although he draws attention to the fact that the sanction can be applied only when establishing its guilt. These are the situations when the error of the tax authority that recognized the tax refund as lawful was due to unlawful and guilty actions of the taxpayer himself.
In the future, the Constitutional Court of the Russian Federation assumed the such position in Resolution No. 9-P of March 24, 2017.
Last questions
We won`t consider in detail the ratio of the objective side of the stipulated Art. 122 of the Tax Code of the Russian Federation for a tax offense and taxpayer's actions for excessive tax refund. We only note that the blame for an unreasonable compensation can be found when the taxpayer:
• entered into a criminal conspiracy with officials of the tax authority;
• deliberately submitted falsified documents.
In other words, when imaginary or feigned transactions take place.
Only in these cases can be found the grounds for bringing to responsibility for excessive tax refund, if nevertheless to admit in principle the possibility of applying established art. 122 of the Tax Code of the Russian Federation.
However, in our opinion, unreasonable tax refund can`t be qualified as non-payment or incomplete payment of tax, and therefore such actions do not form part of the offense established by Art. 122 of the Tax Code. At the same time, the addition of legislation to the norm of p. 4 p. 8 of Art. 101 of the Tax Code, where the amount of excessively compensated tax is called a shortfall, did not create the prerequisites for the conclusion that unreasonable compensation acquired the features of a tax offense, the sanction for fulfillment of which is stipulated in Art. 122 of the Code.
According to paragraph 2 of Art. 11 of the Tax Code of the Russian Federation, arrears are the amount of tax, levy or insurance premiums not paid in the period established by tax legislation. Meanwhile, according to the meaning of p. 4 p. 8 of Art. 101 of the Tax Code of the Russian Federation, arrears in the form of excessively compensated tax amount are formed from the day of actual receipt by the taxpayer of reimbursed funds, which neutralizes the possibility of its self-payment, does not allow to qualify unjustified compensation of the tax as its non-payment or incomplete payment and taking into account the interpretation of all unavoidable doubts, contradictions and ambiguities legislation in favor of the taxpayer (clause 7, Article 3 of the Tax Code) testifies to the impossibility of his prosecution under Art. 122 of the Tax Code.
We can`t ignore several other aspects.
The application to the taxpayer for the results of the on-site tax audit of the sanction for excessive tax refund violates its legitimate interest in legal certainty, since previously the right to refund of the tax had already been confirmed by the results of a desk audit. The definition indicates the differences in the subjects of cameral and on-site inspections, but their content is ignored. Meanwhile, the powers of the tax authority when conducting desk audits in accordance with Art. 176 and 203 of the Tax Code are very significant and, with some exceptions, are not inferior to the powers of the same body when conducting on-site inspections.
Thus, during an on-site inspection, the inspection can eliminate its own shortcomings by re-monitoring the validity of the claim for tax refund. At the same time, the taxpayer doesn`t have the opportunity to independently return the amounts of excessively refunded tax without applying sanctions. The paradox of this situation is reinforced by the fact that a taxpayer who doesn`t have such a basis of legal certainty as a decision to refund the tax can be released from liability by submitting an updated declaration in a timely manner (after paying the tax and penalties). A taxpayer whose claim is confirmed by a decision of the tax authority is in a losing position and can`t avoid liability if he has already received a tax refund.
Unfortunately, these issues were not taken into account by the Constitutional Court of the Russian Federation, therefore, the definition will hardly make the practice of applying the provisions of para. 4 p. 8 of Art. 101 and art. 122 of the Tax Code of the Russian Federation is uniform. Moreover, in our opinion, only the legislator can decide the problem of bringing to responsibility of taxpayers who unreasonably reimbursed the tax.