The procedure for resolving tax disputes is regulated by law. The conflict can be settled in court and pre-trial, but conflicts over the calculation of taxes are associated with difficulties for one of the parties. After all, in fact, the dispute is between a citizen, a company and the state.
Features of tax conflicts
Russian tax legislation defines a tax dispute (hereinafter referred to as the Tax Dispute) as a conflict between a taxpayer and a state body. A taxpayer is understood as an individual, as well as an organization, a commercial and non-profit company.
The actions of officials that affect the interests of the taxpayer may also serve as the basis for a dispute. As a rule, we are talking about employees of the tax inspectorate. The law proposes to resolve such a conflict in an administrative or judicial manner.
The main feature of tax dispute resolution, as we have already mentioned, is that one of the parties to the conflict is always the state represented by the Federal Tax Service. The tax authority represents the interests of the state, which complicates the matter. Therefore, such disputes are handled by qualified lawyers familiar with tax law and related areas.
The legislation allows disputes to arise on various grounds. This means that conflicts initiated by the tax authorities are most often associated with non-payment or violation of the deadlines for payment of tax fees. Individuals or organizations have much more grounds to initiate proceedings. The reasons may be related to:
- Recognition of normative legal acts and decisions made in accordance with them as unlawful.
- The purpose is to recognize the issued decisions on the payment of taxes or fines as invalid.
- A complaint about the inaction of the tax authorities regarding the reimbursement of part of taxes.
Thus, both taxpayers and tax authorities can initiate a dispute.
Administrative procedure for resolving a tax dispute
If you have doubts about the correctness of the actions of tax officers, do not rush to file a lawsuit in court. Contact an experienced lawyer or a law firm that will resolve the conflict in a pre-trial manner.
Firstly, most disputes are resolved by a settlement agreement. Secondly, such an action strategy is more economical in terms of financial and time expenditures. And only if it does not work out in any way to settle the matter in peace, it is worth thinking about going to court.
Some types of conflicts allow the parties to choose their own strategy of action. That is, you can decide for yourself which order of conflict resolution to prefer. However, there are types of disputes that require the plaintiff to first try to settle the case administratively. Without this, the law does not allow you to go to court.
So, the administrative or pre-trial procedure assumes that you will contact a higher authority with a complaint or statement. Whereas the judicial settlement of tax disputes requires that you defend your rights and interests in court.
Pre-trial resolution of tax disputes: features of the procedure
Pre—trial settlement of tax disputes is an alternative to judicial proceedings designed to eliminate violations of the rights of Russian taxpayers as soon as possible.
A division specially created in the system of the Federal Tax Service of the Russian Federation, whose exclusive responsibility is the pre-trial resolution of tax disputes, is engaged in responding to violations, as well as auditing mistakes made.
The Tax Code of the Russian Federation provides two options for protecting the rights of individuals and organizations (Article 137):
- appeal against actions and/or acts of tax authorities in court.
- pre-trial resolution of disputes.
It is important to know that the Federal Law of the Russian Federation No. 153-FZ of July 2, 2013, determines that a taxpayer can appeal against the actions and/or acts of tax authorities in court, only after consideration of his complaint by higher tax authorities.
Pre-trial settlement of tax disputes for Russian taxpayers has several advantages:
- there is no need to pay state duty.
- the complaint is considered promptly.
Pre-trial procedure for the settlement of tax disputes: stages
The pre-trial procedure for the settlement of tax disputes can be divided into several stages:
- • sending a complaint by the applicant to the tax inspectorate, which is a party to the dispute.
- • redirection of an appeal from a lower tax office to a higher one within three days.
- • acceptance of the appeal by a higher authority for consideration or refusal to do so to the applicant.
- • notification of all parties involved about the time and date of the meeting.
- • the request by the tax authorities of additional materials that will help to consider the case on the merits, as well as the independent presentation by the taxpayer of additional documentary evidence of violation of his legal rights.
- • the very consideration of the complaint by the tax authorities and the adoption of an informed decision on it.
- • informing the applicant about the decision.
It is important to know that the complaint is filed no later than one year from the moment when the individual or organization became aware of the violation of their legitimate rights and interests, and the appeal — before the entry into force of the act of the tax authority (within a calendar month, starting from the date of delivery of the resolution to the taxpayer).
Consideration of a complaint on the settlement of tax disputes on the merits
Individuals and companies who believe that their rights have been violated, make, and send a complaint to the regional branch of the tax service (higher tax authority) through the local tax office, which is a party to the dispute.
If the act on bringing the taxpayer to responsibility has not yet entered into force, the applicant submits an appeal. In all other cases — a complaint.
The tax authority whose actions and/or acts are being challenged is obliged to forward the document with all related materials to the higher regional office within 3 days after receipt of such an appeal. The final decision of the tax service must be sent to the applicant within the same period.
The request must specify:
- Full name of the individual applicant and his place of residence (respectively, if the applicant is a legal entity, his name and location are indicated).
- the act that is disputed or the essence of the action/inaction of the tax authorities.
- name of the tax authority that is a party to the dispute.
- the basis for filing a complaint — the essence of the claim.
- applicant’s requirements.
- the way in which the taxpayer wants to receive an answer to his appeal.
The Regional Tax Administration considers the appeal on its merits and makes a final decision on it no later than:
- a calendar month, if this is an appeal against an act bringing the taxpayer to responsibility.
- 15 working days in all other cases.
- The Tax Code of the Russian Federation determines that the settlement of tax disputes ends with one of the possible options (Article 140):
- the tax division refuses to satisfy the applicant’s claims by virtue of legislative norms.
- tax authorities recognize the act and/or actions of officials as illegal and subject to partial or complete cancellation.
If the taxpayer is not satisfied with the decision, he can file a claim with the court for further protection of his civil rights.
When it is necessary to resort to pre-trial settlement of tax disputes?
If the subject of the conflict is the decision of the tax inspectorate based on the results of the audit, the law requires that the parties first try to resolve the conflict in a pre–trial manner. And only if it didn’t work out, you need to go to court. If you wish to challenge the results of a desk or on-site inspection, the court will not consider the claim without evidence that you previously tried to resolve the case by administrative means.
The law also provides for other cases when you should first try to solve the problem by administrative means, and only then file a lawsuit in court. For example, this applies to disputes related to the appeal of non-normative tax acts, actions of officials or non-fulfillment of their duties.
Such conflicts between taxpayers and inspectors as disagreement with the imposed fine, recovery, suspension of account transactions by the tax authorities are resolved administratively. If the inspection staff refuses tax deductions, this issue is also easiest to resolve without going to court.
Advantages of pre-trial resolution of tax disputes
Most of the conflicts affecting tax law are resolved administratively. Even in this case, it will not be superfluous to consult with lawyers and instruct them to conduct the case. Pre–trial settlement of the conflict is the best option, which has many advantages:
- Short terms of consideration of the complaint. A higher authority, where you can file a complaint, will be obliged to consider your application within a few days or weeks, whereas litigation can last for years.
- Absence of state fees and court fees. Resolving the issue in court is always more expensive from a financial point of view. Because when applying to the court, you must first pay a fee. The costs of legal representation in court are higher than for consultations and support in resolving disputes in an administrative manner.
Having considered your complaint, the higher tax authority may leave it without satisfaction or decide in your favor. In this case, the higher authority has the right to cancel the non-normative act or decision. Moreover, the decision of the tax authority can be canceled both completely and partially. Also, officials can make a new decision, recognize the actions of the tax authorities as illegal.
But it is not necessarily possible to resolve the conflict by administrative means. If the decision of a higher instance does not suit you, you can file a statement of claim to the arbitration court.
When can I go to court?
Any natural or legal person who disagrees with non-normative acts, actions or decisions of officials has the right to file a lawsuit against the tax inspectorate. If the tax inspectorate unlawfully creates obstacles to entrepreneurial activity, this may also become the subject of a lawsuit.
The deadline for filing a claim is limited. You have 3 months from the moment when it became known about the violation of rights and interests. After this period, the arbitration court will not accept the claim. In turn, the arbitration court must consider the application within 3 months after filing the claim, and not just consider, but also make a certain decision. It may turn out that the decision of the court of first instance will not suit one of the parties. Then she can appeal it to the Court of Appeal.
Stages of judicial settlement of tax disputes
- Receiving a copy of the decision of the higher authority to which you filed a complaint.
- Preparation of a claim and its submission to the arbitration court together with evidence.
- Consideration of the case by the court and deciding, handing it over to both sides of the conflict.
- Appeal to the Court of Appeal if the results do not suit one of the parties.
Is it possible to avoid tax disputes?
The statistics of judicial practice show that every year the number of initiated court cases on tax disputes does not decrease. On the one hand, this is due to the position of the tax authorities to collect the maximum possible amount of taxes and tax arrears. On the other hand, the imperfection of the mechanisms of the Federal Tax Service gives grounds for filing a lawsuit by private individuals.
To reduce the risks of tax disputes, it is necessary to follow the following rules:
- Monitor ongoing business operations in terms of future tax problems.
- Assist tax inspectors in conducting a tax audit.
Questions and answers
The complaint is filed in writing on paper or in electronic form, signed by the applicant or his representative. The taxpayer can submit the document in person or by sending it by mail.
Decisions on the complaint of individuals and organizations are sent by the tax authorities to the applicant in the same way that the appeal was received by them, namely:
— on paper by mail.
— in electronic form through the personal accounts of the portal of Public Services or the official website of the tax service.
For more operational interaction of fiscal authorities with taxpayers, an online service “Learn about the complaint” has been created. With its help, the applicant, without leaving home, can find out the following information about his complaint:
— incoming number and date of receipt of the document to the tax authorities.
— the final deadline for consideration of the appeal.
— the status of the document now.
— information about the results of the review.
The online service “Solutions to Complaints” was created by the tax authorities specifically to provide information on the results of consideration of taxpayers’ appeals. In the service, information is displayed in the form of decisions of the tax service in the context of categories of taxpayers, articles of the Tax Code, names of taxes, fees, and payments, as well as topics of tax disputes.