Nikita Deynega has assessed for Pravo.ru the appropriateness of involving tax authorities as third parties in disputes

The Commercial Court of the Far Eastern District has ordered a gold mining company from Magadan to reimburse around 300,000 roubles legal expenses to the Interdistrict Inspectorate of the Federal Tax Service for Major Taxpayers No. 9 from Kemerovo in a dispute over an additional charge for mineral extraction tax. The fiscal authority only became a full-fledged co-defendant in the case three years later, while before that, it had as a third party supported the position of the Inspectorate of the Federal Tax Service from Magadan. In the same time, the court expenses included expenses for business trips such as hotel accommodation and business class air tickets.

“In most cases involving additional tax authorities as a third party is formal and has no effect on the process, while it increases litigation costs,” Nikita Deynega, Head of Tax & Administrative Law Practice at Maxima Legal told Pravo.ru legal website.  

Nevertheless, according to the expert, sometimes engaging the Federal Tax Service as a third party may be beneficial for a taxpayer. “This is relevant in cases where the taxpayer seeks to justify the absence of damage to the budget system (for income tax – as a result of symmetrical income/expense accounting, for VAT – as a result of the outgoing tax calculation). In such cases it is advisable to involve not only the taxpayer-contractor but also the tax authority at the place of its registration to confirm the circumstances invoked by the parties”, stressed Nikita.

To read the full article (in Russian), please see Pravo.ru website >>>