Recognition as illegal and cancellation of notification of the results of the tax audit of state revenues
No. 6001-23-00-6ap/1186 dated 31.10.2023
Plaintiff: LLP "A"
Respondent: Russian State Institution "Department of State Revenue"
The subject of the dispute: on the recognition of the illegal and cancellation of the notification of the results of the tax audit No. 98 dated June 20, 2022.
Review of the plaintiff's cassation appeal
PLOT: DGD sent a letter to the plaintiff dated 02/18/2022 №DGD 10-2-12/3964 on the conduct of the hearing procedure regarding the issuance of an inspection order. Then the order of the State Duma of the Ministry of Finance of the Republic of Kazakhstan dated 04.04.2022 No. 898 was received on the appointment of an unscheduled thematic tax audit of LLP "A" on the fulfillment of tax obligations for the period from 01.01.2019 to 31.12.2020.
On the basis of the order of the SRC, the defendant issued order No. 9 dated 07/26/2021. on conducting a thematic audit of LLP "A" on the fulfillment of tax obligations for certain types of taxes and (or) other mandatory payments to the budget: VAT; VAT for the period from 01.01.2019 to 31.12.2020, which was registered with the authority on 12.04.2022 for No. 2235000001701011/00085. Based on the results of the audit, the commissioner issued a documentary tax audit report and notification on the results of inspection No. 9 dated 06/20/2022
According to the disputed notification of the audit results No. 9 dated 06/20/2022, the following were accrued: VAT – 9,438,388 tenge, penalty fee – 2,417,964.02 tenge; VAT – 4,791,743 tenge, penalty fee – 1,463,350.85 tenge, total – 18 111 445.87 tenge. The plaintiff filed a complaint with the Ministry of Finance about disagreement with the disputed notification. The decision of 08/15/2022 denied the satisfaction of the plaintiff's complaint.
Judicial acts:
1st instance: the claim was denied.
Appeal: the decision is upheld.
Cassation: the court's decision and the decision of the appeal have been changed. Regarding the rejection of the claim for recognition as illegal and cancellation of the notification of the results of the tax audit No. 9 dated June 20, 2022 regarding the mutual settlements of LLP "A" with LLP "R", the judicial acts were canceled.
Notification No. 9 dated June 20, 2022 regarding the exclusion of settlements between LLP "A" and LLP "R" was declared illegal and canceled. To oblige the State Revenue Department to recalculate taxes and penalties, taking into account the legal position of the court.
The rest of the judicial acts remained in force. 26 Conclusions: when resolving the dispute and recognizing as legitimate the notification regarding the exclusion of the plaintiff's settlements with LLP "B" and LLP "E", the local courts, guided by paragraphs 2 and 3 of Article 76 of the CPC, legitimately proceeded from the prejudicial significance for this case of the verdict of March 29, 2022 in respect of Yu.V., A.Yu. and the decisions of the Judicial Board for Civil cases dated November 29, 2022. The above-mentioned court verdict established the registration of LLP "B" without the purpose of actually carrying out financial and economic activities for illegal cash withdrawal.
The testimony of the director of the Partnership, Ye.E., both during the criminal proceedings and during the consideration of this case, confirmed the fictitious implementation of transactions with the plaintiff by LLP "B".
Articles 264 and 403 of the Tax Code establish an imperative rule: expenses for a transaction declared invalid on the basis of a court decision that has entered into force are not subject to deduction under the CPN; value-added tax, previously recognized as value-added tax, is subject to exclusion in the following cases: on a transaction declared invalid on the basis of a court decision that has entered into legal force.
If there is a judicial act that has entered into force declaring the transaction between the plaintiff and E LLP invalid, the arguments of the plaintiff's cassation complaint confirming the fact of financial and economic transactions with this counterparty cannot be taken into account either.
The provisions of sub-paragraphs 1) to 22) of Article 264 and sub-paragraphs 1) to 4) of Article 403 of the Tax Code provide grounds for exclusion from deductions for VAT and from the offset of VAT amounts on mutual settlements: a judicial act that has entered into force, indicating the invalidity of the transaction between the plaintiff and his counterparties, a court verdict or resolution that has entered into force to terminate the case on non-rehabilitating grounds in relation to the circumstances indicated during the tax audit.
In the absence of the above-mentioned grounds, the tax authority is obliged to prove the fictitiousness of the financial and economic transactions carried out by the parties. Regarding the exclusion of the plaintiff's settlements with "R" LLP, the board does not agree with the conclusions of the local courts on the following grounds. According to the inspection report, the plaintiff's expenses for 2020 in the amount of KZT 6,500,000 were excluded from deductions, VAT from offset for the 3rd quarter of 2020 - KZT 780,000.
Grounds:
1) LLP "R" has been removed from the VAT register since October 06, 2020 due to absence at its location, included in the list of unreliable taxpayers;
2) the only supplier of goods to "R" LLP was "CMC" LLP.
In the list of goods supplied by this supplier to the address of "R" LLP, there is no information about the delivery of the goods - the FROMM A-452 pneumatic tensioner, and 461 in the amount of 16 pieces.
LLP "R" and LLP "K" did not submit an application for the import of goods and payment of indirect taxes (f.328.00) to the tax authorities, and they did not import goods from third countries. LLP "K" has not submitted a declaration on vehicle tax, land tax and property tax (f.700.00), as well as a declaration on environmental emissions (f.870.00) for 2020 to the tax authority, a declaration on personal income tax and social tax (f.200.00) for Q3 2020 presented with zero values.
In addition, LLP "R" is affiliated to LLP "W K", the order on state re-registration of which was canceled by the decision of the Council of Economic Cooperation of December 08, 2020. Contracts with R LLP for the supply of goods (FROMM A-452 pneumatic tensioner, pneumatic sealer) by the plaintiff were concluded on August 3-5, 2020, that is, before the counterparty was de-registered for VAT.
The actual delivery of goods is confirmed by invoices for the release of goods to the side, reconciliation reports, and photographs of the purchased goods. Payment for the delivered goods was made by the plaintiff in cash, while receipts and fiscal receipts have a QR code and are displayed in an electronic database. The registration of the KKM was made in the state revenue authorities.
The conclusions of the inspection report on the absence in the list of goods supplied by the supplier of the third level to the address of LLP "R", information about the delivery of goods, failure by the counterparty and the supplier of the third level of tax reporting forms cannot be blamed on the plaintiff.
The arguments of the inspectors about the absence of an application for the import of goods and the payment of indirect taxes by LLP "R" and LLP "K" cannot be taken into account, since they do not reliably indicate the absence of this product in the warehouses of suppliers, a tax audit was not conducted in relation to them.
In this regard, the arguments of the tax authority about the fictitiousness of the plaintiff's financial and business transactions with LLP "R", given in the audit report, are based on assumptions and are not proven by the presentation of sufficient evidence.
Based on the above, the board comes to the conclusion that the notification is illegal in terms of excluding the plaintiff's settlements with LLP "R" from the deductions for the CPN and from the VAT offset, which entails a change in judicial acts and satisfaction of the plaintiff's cassation appeal in this part.
In the rest of the requirements, the conclusions of the local courts comply with the law and are not subject to revision.
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