We defend your business against tax claims
We defend businesses in field and desk tax audits, from analysing the audit report to appealing the decision in court. We assess tax risks in advance, so that lawful optimisation does not turn into a retroactive claim.
A separate area is the defence of directors and owners against subsidiary liability for a company’s tax debts, including cases where the company has already been liquidated or is in bankruptcy.
The practice is overseen by a partner of the firm.
What the service includes:
From our practice
How we work
The earlier we join an audit, the more defence options remain.
Tax risk audit
We analyse the audit report or your current tax structure to see the inspectorate’s real position and its weak points.
Pre-trial appeal
We prepare objections to the audit report and an appeal to the higher tax authority. At this stage, part of the claims is withdrawn without going to court.
Court proceedings
We represent the client in the commercial court in a dispute with the tax authority, including appeal and cassation.
Defence against subsidiary liability
We build a separate defence for a director or owner when an attempt is made to recover the company’s tax debt from the individual.
In numbers
The experience behind every recommendation.
Other practices
Unjustified tax benefit and tax reconstruction
Article 54.1 of the Russian Tax Code. Since 2017 this has been the main tool inspectorates use to disallow deductions and expenses on transactions with counterparties deemed “technical”, meaning companies that exist on paper but have no resources to perform the contract. A counterparty’s own violations, such as unfiled returns or unpaid VAT, are not grounds for an additional assessment if the reality of the transaction is proven.
The right to tax reconstruction. Even where the inspectorate has proved that a technical company took part in the chain, the tax can be recalculated on the basis of the real parameters of the transaction rather than disallowing the expenses entirely. This right has to be asserted separately, by identifying the actual performer and documenting the real cost of the work or goods.
We work on this category of dispute already at the stage of objections to the audit report. Part of the additional assessments is removed precisely by proving the reality of the transaction, before the case reaches court.
Related topics:
When a tax dispute becomes a criminal case
Subsidiary liability and criminal prosecution are different mechanisms. Subsidiary liability means recovering a company’s tax debt from a director’s personal assets in bankruptcy or after the company has been struck off the register. Criminal liability under Articles 199, 199.1 and 199.2 of the Russian Criminal Code is an independent basis that can arise regardless of bankruptcy if the tax arrears reach a large or especially large amount.
The moment materials are passed to the investigating authorities. If the decision following an audit has entered into force and the arrears are not paid within the set period, the tax authority is obliged to send the materials on for a decision on opening a criminal case. From that point, explanations given during the audit itself may be used by the investigation. That is why we build the position on the audit and the defence against possible criminal prosecution together from day one, not after the materials have been passed on.
Full compensation of the damage before the court hearing is scheduled is a ground for exemption from criminal liability for this category of offences. We assess this route alongside challenging the assessment, where the chances of setting aside the tax authority’s decision are low.
On this topic:
Tax residency, CFCs and currency control
Residency status is determined by days, not by citizenship. An individual’s residency depends on actual time spent in Russia: more than 183 days within 12 months. For business owners and senior executives who operate in several countries, residency status affects not only the personal income tax rate but also the obligation to declare controlled foreign companies and overseas accounts.
CFC reporting. A stake of 25% or more in a foreign company (or 10% if the combined stake of Russian residents exceeds 50%) creates an obligation to notify the tax authority of the holding and, once the CFC profit threshold is exceeded, to declare the profit itself. Failing to notify, or understating the profit, leads to a fine and an additional tax assessment on the full amount of the CFC’s profit.
Currency control and double tax treaties. Since 2023 Russia has suspended a number of provisions of such treaties with certain foreign jurisdictions, which has complicated structuring income through previously familiar arrangements. Currency control requirements for residents’ operations on overseas accounts remain fully in force. We help establish the current status, bring reporting into order and build an asset ownership structure that takes the existing restrictions into account.
On this topic:
Frequently asked questions
At what point should a lawyer be brought into a tax audit?+
The earlier the better, ideally before the audit report is signed. But we also join at the stage of appealing a decision that has already been issued.
Can a tax authority decision be challenged without going to court?+
Yes. A pre-trial appeal to the higher tax authority is mandatory before going to court and often removes part of the claims.
Is there a risk of subsidiary liability if the company has already been liquidated?+
Yes. Liquidation does not automatically release you from liability, which is exactly why defending directors and owners against such debts is a separate area of our practice.
Do you provide tax advice in advance, not only defence?+
Yes. We assess the tax risks of planned transactions and structures before they are carried out, not only after a claim has been made.
Do you take international structures into account in tax disputes?+
Yes. Within our tax practice we handle CFC matters, currency control and cross-border transactions.