In 2007, 82 percent of tax disputes were settled in court. This year, only 65 percent went before judges.
Photo: Dmitry Kostyukov
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Cos. Abandon Courts in Tax Disputes
Russia’s largest companies are going to court less frequently in tax disputes, the Russian division of Ernst & Young found in research on the country’s tax climate. The auditor says that its findings are not indicative of the presence of an alternative for the settlement of tax disputes, but of companies’ unwillingness to draw the Federal Tax Service’s further attention to itself in noncritical tax cases. This the Ernst & Young’s fourth tax review. It is based on responses from 78 companies, 53 percent of which are large Russian business, and 47 percent international companies active in Russia.
The respondents noted fewer visits from the tax inspector. Those who were visited more than once a year decreased from 12 percent last year to 3 percent this year. The number of those visited once remained practically level at 25 percent in 2007 and 24 percent this year. The number of those visited once in two years increased from 23 to 32 percent in the same period. The most typical experience for a company in Russia is to have 2-5 tax disputes per year (32% of respondents). Twenty percent of respondents had 11-20 disputes per year; 5 percent had even more.
In 2007, 82 percent of tax disputes were settled in court. This year, only 65 percent went before judges. The VAT is the greatest source of disagreement, involving 49 percent of cases that found their way to court. Sixty-six percent of the cases involved sums over $1 million. Companies won 89 percent of their cases, the same percentage as last year. Nationwide, taxpayers win 70 percent of all tax cases in court. Exporters received refunds on the VAT after 3-6 months on average this year, as opposed to two months last year.
www.kommersant.com
All the Article in Russian as of Oct. 15, 2008
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