Small is good

Statistics on the outcomes of the court proceedings in tax cases reveal that taxmen loose an absolute majority of litigations against small and medium sized companies.

According to the data published by the Federal Tax Service, in 2008 over 54% of their tax claims were successfully appealed in court. In other words, where a case went to trial the authority in average received only 44 roubles per one hundred they claimed. In 2007, however, Christmas came early to FTS – they got 67% of what they asked for - at the expense of Yukos which paid 585 billion roubles (23 billion US dollars) that year.

Overall the statistics seem to comply with international practice. The principal difference is that pre-trial settlements are, strictly speaking, not possible in Russia and the taxmen often go to court where a case is indubitable failure. Keeping this in mind, the data - for FTS at least - is not bad at all.

On the other hand, according to the Supreme Arbitrazhniy Court’s figures 70% of appeals against the decisions of the tax service are successful. Thus, FTS wins only 30% of all cases but gets over 40% of its monetary claims satisfied.

In 2007 only 0.5% of all taxpayers were investigated which however, included 65% of companies considered big, and nearly every one of the latter (over 99%) was penalised.

The data certainly suggest that taxmen are more persistent in chasing bigger fish whereas representation in smaller cases is weak.

 

October 20, 2009.

 

 

Statistics reveal that taxmen are persistent in chasing bigger fish whereas representation in smaller cases is weak.
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