Advocates at the Law firm "YUST" successfully represented the LLC “Ernst & Young” in a dispute with a tax authority

Inspectorate No. 5 of the Federal Taxation Service of Russia for the City of Moscow conducted a field taxation check of the LLC “Ernst & Young” and, according to the field check’s results, decided to bring the taxpayer to tax responsibility for committing a tax offence.

Pursuant to this decision, the tax authority proceeded to exact the additionally charged, according to the field check’s results, sums of taxes, penalty fees and fines. As a result, corresponding sums were transferred from the taxpayer’s account without recourse to the court.

The LLC “Ernst & Young” filed a claim to the Arbitration Court of the City of Moscow to rule illegal the Inspectorate’s acts and actions of exacting the additionally charged sums as well as to charge interest that the sums of the tax, penalty fee and fine, which the tax authority had excessively (illegally) charged, accrued.

The Arbitration Court of the City of Moscow by its ruling of 23.12.2009 fully satisfied the company’s claim.

The Ninth Arbitration Court of Appeal by its ruling of 17.03.2010 upheld the decision of the first instance court.

Both court instances, satisfying the company’s claims, based themselves on the following. The Inspectorate field check decision was ruled invalid by another case’s ruling of the Arbitration Court of the City of Moscow. The acts and actions of the tax authority of exacting, according to the field check results, the additionally charged sums of taxes, penalty fees and fines are derived from the Inspectorate decision. Thus, these acts and actions are also illegal, and exacting from the Inspectorate of the interest that the sums of the tax, penalty fee and fine, which the tax authority excessively (illegally) charged, accrued, is in concordance with the taxation legislation.

The Federal Arbitration Court of the district of Moscow by its resolution of 13.07.2010 upheld previous decisions of the arbitration courts on this case, and dismissed the cassational claim of Inspectorate No. 5 for the city of Moscow.

Alexei Popov and Maxim Rovinskiy, advocates at the Law firm "YUST", together with in-house counsel represented the LLC “Ernst & Young” in the arbitration proceedings.