Tax Disputes

A Russian tax claim can be challenged, but only in a fixed order: written objections to the audit report, an appeal to the higher tax authority and then a claim in the arbitrazh court. Missing a step closes the next one. Attorney Elena Petrova helps companies and individuals contest tax assessments in Russia, including foreign owners and Russian taxpayers now living in California.

We begin by reading the audit report line by line, comparing it with primary documents and marking which findings rest on evidence and which rest on the inspector's assumptions.

Types of Tax Audits

The Federal Tax Service runs two kinds of audits. A desk audit reviews a filed return in the tax office and relies on documents the taxpayer submits on request. A field audit is broader: inspectors examine several years of activity, question employees and counterparties and may inspect premises.

Most large assessments come from field audits. Typical issues are VAT deductions linked to so-called technical companies, reclassification of contractors as employees, transfer pricing and the use of reduced tax regimes. The Tax Code prohibits reducing the tax base through distortion of facts, and inspectors often build their case on this rule.

Behaviour During the Audit

Much is decided while the audit is still running. Every document handed over, every witness interview and every explanation becomes part of the evidence. We prepare staff for interviews, review document requests for scope and check that inspectors stay within the audit period and subject.

A taxpayer may also provide additional explanations and evidence on its own initiative. This is often the moment to correct a weak point before it enters the report.

Objections to the Audit Report

After the audit, the inspectors issue a report with their findings. The taxpayer has one month to file written objections. The head of the tax office then reviews the materials, usually with the taxpayer present, and issues a decision.

Objections should address each finding separately and attach documents that the inspectors did not consider.

Appeal to the Higher Authority

Russian law requires a pre-trial appeal to the regional tax department before a decision can be challenged in court. A timely appeal filed before the decision enters into force suspends it, which protects the company's accounts from immediate collection. The appeal is also a chance to raise procedural breaches, such as denial of access to audit materials.

Arbitrazh Court Proceedings

Companies and entrepreneurs challenge tax decisions in the arbitrazh court, individuals usually in a court of general jurisdiction. The burden of proving the grounds for the assessment rests on the tax authority. Courts pay close attention to real business purpose, the actual performance of contracts and the taxpayer's diligence in choosing counterparties. Interim measures can suspend collection while the case is heard.

Planning a Defence Strategy

A sound strategy weighs the full cost: tax, penalties, interest and possible criminal risk for managers where the amounts are large. Sometimes partial payment of undisputed amounts and focus on the strongest points gives a better overall result. We also assess whether the dispute can be settled at the appeal stage.

How to Begin

Send the audit report or decision, the objections filed so far and the key contracts. You will receive an assessment of the grounds and deadlines.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.