On claims of legal entities against tax authorities related to violation of tax legislation

           According to Articles 666 and 668 of the Tax Code, a taxpayer has the right to appeal to the court the notification of the results of a tax audit and the actions (inaction) of tax officials.

The procedure for appealing against actions (inaction) of officials, including in the process of conducting tax audits, is regulated by Chapter 95 of the Tax Code.

The right to appeal, enshrined in Article 686 of the Tax Code, is one of the basic rights of a taxpayer and provides the taxpayer or his authorized representative with the opportunity to defend their rights and legitimate interests in relations with tax authorities by contacting both a higher tax authority and a court.

The exercise by a taxpayer of the right to appeal granted to him by the state generates obligations for other participants in legal relations, in particular for officials of tax authorities and, as a result, the responsibility of officials for non-fulfillment or improper fulfillment of the obligation that has arisen.

The State has provided the taxpayer with the right to appeal decisions, actions (inaction) of officials of the tax service bodies, and therefore the state is obliged to apply state coercion measures to persons who prevent the taxpayer from exercising his legitimate right.

The judicial procedure for considering applications for challenging the results of a tax audit and actions (inaction) of tax officials is regulated by Chapter 27 of the CPC, since in this order decisions of tax authorities are challenged, as a result of which a legal entity is charged with a particular duty.

In accordance with Article 279 of the CPC, decisions, actions (inaction) challenged in court include collegial and individual decisions and actions (or inaction), as a result of which: - the rights, freedoms and legally protected interests of legal entities are violated, -obstacles to the exercise by a legal entity of its rights and legally protected interests are created., - any obligation has been unlawfully imposed on a legal entity or they have been unlawfully held accountable.

Civil cases on applications filed in accordance with Chapter 27 of the CPC arise from public legal relations and are considered in the order of special claim proceedings, with the exception of cases arising from property and binding legal relations, which are considered only in the order of claim proceedings. Special claim proceedings are a type of claim proceedings that have the following characteristics::

1) the dispute is resolved by appealing against the decisions, actions (inaction) of the subjects listed in the first part of Article 278 of the CPC, which violated the rights, freedoms and legally protected interests of citizens and legal entities;

2) the case is not subject to consideration in absentia;

3) the case cannot be settled by an amicable agreement;

4) in cases of the specified category, a shortened limitation period and a shortened time limit for the consideration of cases have been established.

In the event of a dispute over the right arising from property or binding legal relations, the court, in accordance with the second part of Article 290 of the CPC, issues a ruling on the consideration of the case in the order of claim proceedings.

In this regard, civil cases on the application of legal entities to the tax authorities to appeal decisions, actions (omissions) of officials of the tax service, considered in accordance with Chapter 27 of the CPC, do not belong to the generalized category of cases under line 147.

Moreover, generalizations of judicial practice in the consideration of disputes in cases of challenging actions (omissions) and decisions of tax authorities, challenging actions (omissions) and decisions of tax authorities, including proceedings in cases of challenging notifications based on the results of inspections of tax authorities (special claim proceedings) on the distribution of Classifier lines were distributed to the Mangystau Regional Court.

The generalization of judicial practice in the consideration of disputes related to violations of tax legislation (on claims of legal entities against tax authorities (line number 147)) should have been carried out on claims of legal entities against tax authorities, that is, those under consideration in legal proceedings, and not on applications (Chapter 27 of the CPC).

On jurisdiction

A legal entity that believes that its rights have been violated has the right to apply to the judicial authorities for protection of its rights.

Within the meaning of Article 8 of the CPC, State bodies, legal entities or citizens have the right to apply to the court for the protection of the rights and legally protected interests of other persons or an indefinite circle of persons in cases provided for by law.

These disputes were considered by specialized inter–district economic courts (hereinafter referred to as the Economic court) under the jurisdiction established by Chapter 3 of the Civil Procedure Code.

In accordance with the first part of Article 30 of the CPC, specialized interdistrict economic courts consider civil cases on property and non-property disputes between citizens engaged in business activities without forming a legal entity, legal entities, as well as corporate disputes.

In accordance with Article 31 of the CPC, a claim is brought against a legal entity at the location of the body of the legal entity. According to the rule of general jurisdiction, the claim is filed at the location of the defendant.

In this case, the location of the organization or institution is the place of its state registration as a legal entity, as indicated in the certificate of state registration and constituent documents.

Filing a claim

The statement of claim must comply with the requirements provided for in Articles 150, 151 of the CPC. At the stage of filing an application and accepting it for production, it is important to verify the legal status of the taxpayer.

For all categories of tax disputes, when applying to the economic court, it is necessary that the taxpayer (tax agent, fee payer) has the status of a legal entity.

According to the norms of the current legislation of the Republic of Kazakhstan, the document confirming this status is a certificate of state registration.

In accordance with paragraph 2 of Article 150 of the CPC, it is mandatory to indicate in the application the name of the court to which it is addressed, the name of the applicant, his location, identification number and bank details.

Documents confirming the circumstances on which the taxpayer applicant bases his claims must be attached to the statement of claim.

The acceptance of an application for court proceedings may be refused only on the grounds provided for in subparagraph 2) of Article 153 of the CPC. On the grounds provided for in subparagraphs 2) – 7) of part 1 of Article 154 of the CPC, the claim may be returned to the plaintiff.

Preparing cases for trial

The preparation of cases for trial is carried out properly. After accepting the application for trial, the court, in accordance with Article 168 of the CPC, issues a ruling on the preparation of the case for trial.

The objectives of this stage are to determine the nature of the disputed legal relationship, the circumstances relevant to the proper consideration of the case, and to assist the parties in providing evidence.

The preparation of civil cases for trial is a necessary part of the stage of proceedings in the court of first instance and creates the necessary conditions for a full, comprehensive and objective examination of the evidence presented by the parties, the actual rights and obligations of the parties subject to the application of substantive law, and the issuance of a lawful and reasoned judicial act.

When preparing a case for trial, judges should be guided by the provisions of the CPC and the regulatory decree of the Supreme Court of the Republic of Kazakhstan "On the preparation of civil cases for trial."

In accordance with Article 168 of the CPC, the judge is obliged in each case to make a ruling on the preparation of the case for trial, indicating in it the specific actions that, taking into account the category of dispute, are necessary for the timely and correct resolution of the dispute at a court hearing.

In the text of the definition, the parties are invited to submit the necessary documents to the court by a certain specific date. The parties are warned that all evidence and objections must be submitted by them before the case is considered on its merits.

When preparing civil cases for trial, judges should explain to applicants and defendants the procedural rights and obligations provided for in Article 47 of the CPC, including the obligation to provide evidence in support of stated claims or objections to them, as well as the legal consequences of a party's failure to fulfill this procedural obligation.

If the plaintiff does not indicate the defendant's arguments in the statement, or the materials attached to the statement of claim contain information about the defendant's noteworthy objections to the claim, it is necessary to summon the defendant to the judge for an interview when preparing the case for trial.

Clarifying the merits of the defendant's objections in a conversation with the defendant makes it possible to clarify the circumstances and evidence relevant to the case, and also, at the request of the defendant, will allow him to assist in obtaining evidence from other legal entities that the defendant cannot independently present to the court.

In order to more accurately determine the nature of the dispute and clarify other issues relevant to the proper resolution of the case, the plaintiff and the defendant may be summoned to the judge for a conversation at the same time, if the judge deems it necessary.

The provision of paragraph 13) of Article 170 of the CPC indicates that this list of procedural actions is not exhaustive and the judge is granted independence by law in choosing additional procedural steps.

In accordance with the provisions of paragraph 19 of the said regulatory resolution, specified in Article 167 of the CPC, the seven-day period for preparing cases for trial on claims for recovery of alimony, for compensation to the victim for damage caused by injury or other damage to health, as well as in case of loss of the breadwinner and for all claims arising from labor relations, is not subject to extension..

In other categories of cases, in exceptional cases, this period may be extended by a judge to one month only in cases of special complexity.

Exceptional cases should be understood as circumstances in which the actions prescribed by the judge to prepare the case for trial could not be completed within the seven-day period or the period provided for by legislative acts for certain categories of cases.

The quality of drafting judicial acts.

According to Article 218 of the CPC, the court's decision must be lawful and justified. A decision is lawful when it is made in compliance with the norms of procedural law and in full compliance with the norms of substantive law applicable to this legal relationship, or is based on the application, if necessary, of a law governing a similar relationship, or proceeds from the general principles and meaning of civil legislation and the requirements of good faith, reasonableness and fairness (article 5i Article 6 of the CPC ).

A decision is considered justified if it reflects facts relevant to the case, confirmed by evidence examined by the court that meet the requirements of the law on their relevance, admissibility and reliability, or are well-known circumstances that do not need to be proven and are collectively sufficient to resolve the dispute.

Judicial acts of the courts of the Republic of Kazakhstan are subject to registration taking into account the provisions of the Code of Civil Procedure, as well as the regulatory decree of the Supreme Court of the Republic of Kazakhstan No. 5 dated July 11, 2003 "On Judicial Decision" (with amendments and additions made by regulatory resolutions of the Supreme Court of the Republic of Kazakhstan No. 6 dated June 29, 2006 and No. 2 dated January 12, 2009). Courts should also be guided by the provisions of the Methodological Recommendations on the design of judicial acts of the courts of the Republic of Kazakhstan, approved by the order of the Chairman of the Supreme Court dated March 17, 2010 (hereinafter referred to as the Methodological Recommendations), In accordance with Article 221 of the CPC, the decision consists of introductory, descriptive, motivational and resolute parts.

According to part 3 of Article 221 of the CPC, the introductory part of the decision specifies: the date and place of the decision; the name of the court that issued the decision; the composition of the court; the secretary of the court session; the parties; other persons participating in the case and representatives, the subject of the dispute or the stated claim.

The quality of judicial acts meets the requirements of Articles 217, 218 of the CPC. The reasons for the decisions taken are given in detail, with reference to the evidence provided by the parties and the law to be applied.

Terms of consideration of cases.

According to Article 174 of the CPC, civil cases are considered and resolved within up to two months from the date of completion of the preparation of the case for trial.

The language of the proceedings According to Article 14 of the CPC, the language of the proceedings is determined by a court ruling, depending on the language in which the statement of claim is filed with the court.

The proceedings in the same civil case are conducted in the established original language of the proceedings.

Arystan Holding LLP appealed to the specialized interdistrict economic court of the Kostanay region with a claim against the RSU "Department of State Revenue for the Kostanay region" to challenge the notification, protect business reputation and recover damages in the amount of 1,000,000 tenge, indicating that the defendant (hereinafter referred to as the Department) was excluded from deductions during the audit. as unconfirmed expenses for transportation services, namely due to the lack of tear-off coupons, waybills and waybills (hereinafter referred to as TTN) for 2012-2014 according to the CPN, while, during the tax audit, the plaintiff submitted the requested documents for review and work, the taxpayer had all the travel vouchers and TTN, but the inspectors concluded on the basis of the verified two or three TTN that they were issued incorrectly and, therefore, they did not exist at all, reflecting this in the inspection report.

Then the transport service providers were independently selected by the inspector and all costs for them were deducted without checking the primary accounting documents, and as a result, the supplier of IP "Dolgopolov I.V." turnover in the amount of 2,426,000 tenge was reflected in the act, and according to accounting data and according to the provided declarations on form 300.08, the services were provided by IP "Dolgopolov V.I." for a total of 170,000 tenge.Contracts for freight forwarding services (freight forwarding) were concluded with the counterparties of Travel KST LLP and Servicekz LLP, in accordance with art. 708 of the Civil Code of the Republic of Kazakhstan, under the terms of which the forwarder independently concluded contracts for the carriage of goods with carriers on his behalf, acted as a shipper. For the services rendered, the forwarders issued invoices for the services of Arystan Holding LLP in accordance with the acts of work performed. The obligations for the registration and storage of waybills and tear-off vouchers of waybills lie with the freight forwarder, but not with the client, Arystan Holding LLP.

Waybills of a motor vehicle and waybills are subject to registration in the logs of the movement of waybills and waybills, and storage by the Carrier together with the logs for 5 years, Chapter 35 of the Civil Code of the Republic of Kazakhstan specifies forwarding contracts in which the availability and registration of a TTN waybill is not provided at all, this chapter It is subject to the Law of the Republic of Kazakhstan dated September 21, 1994 No. 156-XIII "On Transport in the Republic of Kazakhstan", which defines the basis of legal, economic and organizational activities of transport of the Republic of Kazakhstan.As proof of the relationship between Arystan Holding LLP and Travel KST LLP and Servicekz LLP, primary accounting documents were presented: copies of contracts, selectively copies of invoices issued in accordance with Article 264 of the Tax Code of the Republic of Kazakhstan, confirming the receipt of transport and expedition services, but they were not taken into account by the defendant, since as there are about 1,500 of them in total.During the audit, the Department excluded turnover for the supplier of AQUAPOOL LLP from deductions, having unreasonably indicated that the plaintiff had unlawfully deducted the amounts for mutual settlements with him, as a result of the analysis of the tax statements, the tax authority found that in the tax statements f. 300,000 for VAT for the 1st and 2nd quarter of 2013.

AQUAPOOL LLP did not reflect the sale to Arystan Holding LLP, the reports were submitted with zero indicators, respectively, AQUAPOOL LLP did not pay VAT, at the same time, a counter check with the supplier was not conducted. The plaintiff has all the primary supporting documents stating that he purchased the goods from AQUAPOOL LLP, they were entered into the partnership's warehouse on receipt orders. He believes that AQUAPOOL LLP should be responsible to the tax authorities for misrepresenting information in tax reporting forms, and not mislead the tax authorities.

According to the Pyramid of Buyers report, according to Invest Trade Company LLP, Arystan Holding LLP sold goods (services) in the amount of 22,464,235 tenge to them, however, according to accounting data from Arystan Holding LLP, there was no sale, and the applicant never contacted Invest Trade Company LLP. He worked, the Department did not provide documents confirming the implementation, and the counter-check with the supplier was not completed at the time of signing the act. The tax authority has repeatedly expressed the invalidity of TTN, signatures of drivers of freight forwarders, these untrue information discredit the business reputation of Arystan Holding LLP, its employees and thereby harm the image of the enterprise. In order to prove the validity of the TTN, the plaintiff was forced to search for legal entities and individuals who provided transport services, select explanatory notes from them, ensure the appearance of witnesses and third parties in court, thereby incurring additional fuel costs for the search for the above-mentioned persons. Also, during the collection of evidence, additional working hours of the plaintiff's employees were spent, calls were made to cell phones and visits to cargo carriers, which caused damage to business reputation in the amount of 1 million tenge. The court's decision partially satisfied the claim.

The court decided: to declare illegal and cancel the notification of the results of the tax audit No. 537 dated October 3, 2014, issued in respect of Arystan-Holding LLP in terms of the additional amounts of CPN in the amount of 16909336 tenge, VAT in the amount of 2695707 tenge, to oblige the RSU "Department of State Revenue for Kostanay region" to recalculate the penalties for the above to recognize the cancelled amounts of taxes, the right to refund to Arystan-Holding LLP the paid state duty in the amount of 196050 tenge (according to the payment order dated October 17, 2014 DB Sberbank JSC), to refuse the claim for the protection of business reputation and the recovery of damages in the amount of 1,000,000 tenge.

The Court of first instance, rejecting the claim for the protection of business reputation and recovery of damages in the amount of 1,000,000 tenge, proceeded from the following: according to the Regulatory Decree of the Supreme Court of the Republic of Kazakhstan "On the application in judicial practice of legislation on the protection of honor, dignity and business reputation of individuals and legal entities", defamatory information is such untrue information that they detract from the honor and dignity of a citizen or an organization in public opinion or the opinion of individual citizens in terms of compliance with laws and moral principles of society (for example, information about the commission of a dishonest act, misconduct; information discrediting industrial and economic activities, reputation, etc.). At the same time, demands for refutation of information containing relevant criticism of shortcomings in work, in a public place, in a team, in everyday life cannot be recognized as justified. However, the reasoning part of the decision did not indicate whether the information was disseminated, the refutation of which was sued, whether they discredit the reputation of the LLP, whether this information corresponds to reality.

 Sources of tax legislation.

According to paragraph 1 of Article 2 of the Tax Code, the tax legislation of the Republic of Kazakhstan is based on the Constitution of the Republic of Kazakhstan, consists of the Tax Code and other legal acts, the adoption of which is provided for by this Code.

Such regulatory legal acts include regulatory Government resolutions, regulatory legal orders from the head of an authorized state body in the tax service system, and regulatory legal decisions of local representative bodies on setting individual tax rates and other mandatory payments to the budget.

The main regulatory acts regulating relations arising from disputes related to violations of tax legislation are:

1. The Constitution of the Republic of Kazakhstan The Constitution of the Republic of Kazakhstan defines the starting point of tax law – the obligation of everyone to pay legally established taxes.

2. The Code of the Republic of Kazakhstan on Taxes and Other Mandatory Payments to the Budget (the Tax Code) (hereinafter referred to as the Tax Code).

The Tax Code of the Republic of Kazakhstan is designed to be applied as a direct-acting regulatory legal act, excluding the elaboration or clarification of subordinate regulations.

The NC structure consists of three parts:

1. General - it defines the principles of the formation of tax legislation.

2. Special – it contains the methodology and tax bases.

3. Tax administration - contains procedural issues.

3. International agreements.

In accordance with paragraph 5 of Article 2 of the Tax Code, if an international treaty ratified by the Republic of Kazakhstan establishes rules other than those contained in the Tax Code, the rules of the said treaty shall apply.

Today, the most common types of international treaties on taxation are bilateral intergovernmental treaties - Conventions on the Elimination of Double Taxation and the Prevention of Tax Evasion.

In the practice of concluding international agreements on taxation in the Republic of Kazakhstan, there are also cases of concluding multilateral international agreements. All the above-mentioned agreements (there are more than 100 of them) are available in the regulatory framework "Legislation", therefore it makes no sense to list them.

The Law of the Republic of Kazakhstan "On regulatory legal acts". This law regulates the general rules for the operation of regulatory legal acts. By virtue of paragraph 1 of Article 30, paragraph 6 of Article 36 of the Law of the Republic of Kazakhstan "On Normative Legal Acts", the official publication of normative legal acts concerning the rights, freedoms and duties of citizens is a prerequisite for their application and implementation.

Paragraph 1 of article 38 of the said Law stipulates that the normative legal acts of state bodies listed in subparagraph 4) of paragraph 2 of article 36, which have a generally binding meaning concerning the rights, freedoms and duties of citizens, cannot be put into effect without state registration with the judicial authorities.

In accordance with Article 9 of the Tax Code, regulatory legal acts regulating taxation issues are subject to mandatory publication in official publications. Courts may not apply regulatory legal acts that do not comply with the specified conditions when considering tax disputes.

Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 1 dated February 27, 2013 "On judicial practice of applying tax legislation" Summarizing, it is necessary to focus on general issues of tax law - characteristics of tax legislation, tax legal relations.

In accordance with the requirements of Article 1 of the Tax Code of the Republic of Kazakhstan, tax relations are power relations for the establishment, introduction and procedure for calculating and paying taxes and other mandatory payments to the budget, as well as relations between the state and the taxpayer related to the fulfillment of tax obligations.

Therefore, a tax legal relationship is a social relationship that arises on the basis of the implementation of tax law norms.

At the same time, it is necessary to distinguish the difference between tax and civil legal relations. This difference lies in the power-property nature of the tax legal relationship.

This difference is indicated in paragraph 4 of Article 1 of the Civil Code of the Republic of Kazakhstan, which establishes that civil legislation does not apply to property relations based on administrative or other authority subordination of one party to another, including tax and other budgetary relations, except in cases provided for by legislative acts.

These relations are regulated by the Constitution of the Republic of Kazakhstan, the Tax Code of the Republic of Kazakhstan, as well as other acts of the tax legislation of the Republic of Kazakhstan and other sources of the current law of the Republic of Kazakhstan.

The courts of the republic mainly consider disputes on applications from legal entities to the tax authorities to challenge decisions (actions or omissions) of the tax authority, since tax relations between the state represented by the tax service and the taxpayer are purely administrative, i.e. unilaterally authoritative.

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