- Posted by Jon Hellevig
- On March 6, 2015
- Comments 0
- Views: 2993
The following article is an excerpt from Awara Russian Tax Guide, the first comprehensive book offering a full overview of all Russian taxation laws and rules. Awara Russian Tax Guide provides insight into the general framework of the Russian tax laws, the Tax Code and its principles. It describes the general rules of the Tax Code Part I and each type of tax and tax regime of Tax Code Part II, among them: Profit Tax, VAT, Personal Income Tax, Property Tax, Employer’s Social Contributions. The book also covers the now so important case law and taxation principles set by court precedents.
The highest norm of Russia tax law is in the Russian Constitution (article 57), which states, that “all are obliged to pay legally established taxes and duties” and the principle that new taxes and adverse changes to taxes cannot be applied retrospectively. There are direct references to taxation in five other articles of the constitution: articles 57, 71, 75, 104, 106 and 132. Article 57 contains the main general reference to taxation proclaiming: “Everyone is obliged to pay legally established taxes and levies. Laws introducing new taxes impairing the situation of the taxpayer do not carry retroactive effect.” Article 71 states that taxation laws are the prerogative of the Russian Federation (as opposed to being in regional competence). According to article 75, item 3 of the Constitution the general principles of taxation are determined by federal law, which federal law in this case is the laws incorporated in the Tax Code
Since 1998 the main laws governing taxation have been codified in the Tax Code, which consists of two parts. Tax Code Part I was adopted in 1998 and entered into force on 1 January 1999. Tax Code Part I regulates general taxation matters, setting out the most important provisions of the Russian taxation system. Tax Code Part I specifies the procedures on how taxes are introduced and repealed and defines all aspects of interactions between state, taxpayers and tax agents. The first part of the Tax Code also provides the general principles of taxation and the rules for tax administration including the rights and obligations of taxpayers and tax authorities. The below table gives an overview of the provisions of Tax Code Part I.
In particular the Tax Code Part I regulates:
- Types of taxes and fees that can be levied (articles 12, 13, 14, 15)
- Circumstances giving rise to tax liability and its discharge (Chapter 8)
- Principles of the introduction, enforcement and cancellation of taxes and dues, federal and local (article 12)
- The general conditions for setting taxes and levies (article 17)
- Rights and obligations of the taxpayers and the tax authorities (articles 21, 23, 31, 32)
- Detailed description of administrative compliance rules and Tax Audits (Chapter 14)
- Liability for Tax Offences (Section VI of the Tax Code)
- The appeal procedures and dispute regulation (Section VII of the Tax Code)
It is intended that the legal provisions of all federal taxes and levies would be fully detailed in the Tax Code (see e.g. article 3). Tax Code Part II is devoted to the different types of taxes (tax regimes) and is divided in chapters containing such rules for each tax separately. This Awara Russian Tax Guide will explore the most important of these rules throughout the book.
The Tax Code should determine (article 17) who is taxpayers of a given tax; objects of taxation; tax base; tax period; tax rates; provisions for recording, reporting and settlement of the tax (tax administration); and exemptions (if any). For regional and local taxes the Tax Code sets out common principles with an aim to unify taxation through the whole of Russia. Regional and local governments are left with some discretion to set tax rates, extend some exemptions and decide on other taxation matters within the framework of the Tax Code (art. 12).
The aim has been that the Tax Code in principle sets a closed list of taxes and levies (articles 13, 14 and 15). This principle has, however, not been fully adhered to. Some important provisions of tax law are still contained in other laws.
Some of the provisions of the Law on Tax Authorities of the Russian Federation (originally of March 1991) are still in force. Similarly some of the provisions of the Law on Corporate Profit Tax of December 1991 are still in force (although the bulk of the law has been abolished).
There are also a number of obligatory official charges (duties, dues) which are not recognized as taxes (quasi-taxes) but which de facto are of tax nature in the sense of being mandatory contributions imposed by the lawmaker and collected for the purpose of financing state functions and expenditure).
Such mandatory charges are:
– Customs duty
– Customs payments (these include: import duty, export duty, VAT levied on goods imported into the customs territory of the Customs Union, excise duty levied on goods imported into the customs territory of the Customs Union, customs fees)
– Employer’s social contributions
– Dues for use of water resources
– Environmental protection fees and charges.
It is also worth noticing that some other important laws also contain important taxation specific provisions, such laws are:
- Code of Administrative Offences
- Criminal Code (contains the corpus delicti of tax crimes and the sanctions thereof).
- Civil Procedure Code
- The Commercial Procedure Code.
Determining which laws concern taxation we also need to consider what as such is a tax. We would suggest to define a tax as a mandatory charge imposed by the lawmaker and collected for the purpose of financing state functions and expenditure.
By an explicit provision of the Tax Code (article 3) all compulsory payments and charges that are of the nature of a tax and levy as defined in the Tax Code fall under the general regulations of the code. Thus taxes, levies, other dues and charges would also be regulated by the same set of principles and rules. The regulations concerning employer’s social contributions are a case in point. Presently an employer pays such contributions to the Pension Fund, Social Fund and Medical Fundя. These funds are considered to be off the balance of the Russian State budget. Some experts would like to draw from this the conclusion that employer’s social contributions were therefore not to be considered to be under the general tax laws.
Prior to a change of law (with effect of January 2010 the employer’s contributions were paid in form of a so-called unified social tax which was regulated by the Tax Codes and especially its chapter 24. And yet before the Unified Social Tax was introduced in 2001 the contributions were paid similarly to four different funds.
The Different Taxes and Special Tax Regimes
Below we will list the different types of taxes and tax regimes by grouping them in categories based on the hierarchical status of the taxes and dues: Federal, Regional or Local (Municipal). After the list of types of taxes follows a list of the special tax regimes.
Federal Taxes and Levies
- Profit Tax (Tax Code chapter 25)
- Value Added Tax (Tax Code chapter 21)
- Excises (Tax Code chapter 22)
- Personal Income Tax (Tax Code chapter 23)
- Mineral Extraction Tax (Tax Code chapter1)
- State Duty (Tax Code chapter3)
- Water Tax (Tax Code chapter2)
- Charges for Use of Natural Resources (Fauna Dues) (Tax Code chapter1)
Regional Taxes and Fees
- Property Tax (Corporate) (Tax Code chapter 30)
- Tax on Gambling Business (Tax Code chapter 29).
- Transport Tax (Tax Code chapter 28).
Local Taxes and Fees
- Land Tax (Tax Code chapter 31)
- Individual Property Tax (Tax Code chapter 32)
Special Taxation Regimes
The Russian law may provide for some special taxation regimes (systems of taxation) for the calculation and payment of taxes for certain types of activities or taxpayers.
Currently, the following special tax regimes are in force:
- A special tax regime for producers of agricultural goods (Tax Code chapter 26.1; chapter 20 Taxation of Small and Medium Enterprises (SME) and Certain Activities of Individual Entrepreneurs in Russia of the present book);
- The simplified system of taxation (Tax Code chapter 26.2, chapter 20 Taxation of Small and Medium Enterprises (SME) and Certain Activities of Individual Entrepreneurs in Russia of the present book);
- The unified tax on imputed income for certain types of activities (Tax Code chapter 26.3, chapter 20 Taxation of Small and Medium Enterprises (SME) and Certain Activities of Individual Entrepreneurs in Russia of the present book);
- A special tax regime for the performance of production sharing agreements (Tax Code chapter 26.4, chapter 20 Taxation of Small and Medium Enterprises (SME) and Certain Activities of Individual Entrepreneurs in Russia of the present book);
- Taxation by license (taxation based on a patent; from January 2013, Tax Code chapter 26.5, chapter 20 Taxation of Small and Medium Enterprises (SME) and Certain Activities of Individual Entrepreneurs in Russia of the present book);
- Regimes in special economic zones (Agreement on the free (special) economic zones in the customs territory of the Customs Union and the customs procedure of free customs zone; Law of 22.07.2005 No. 116-FZ “On Special Economic Zones in the Russian Federation Law of 31.05.1999 No. 104-FZ; Law of 10.01.2006 No. 16-FZ, Law of 30.09.2013 No. 267-FZ, chapter 9 Tax Concessions and Subsidies of the present book).
By quasi-tax payments we mean those legally imposed obligatory payments which in essence are like taxes albeit not regulated by the Tax Code. These are:
- Customs duties
- Customs dues (or fees)
- Employer’s social and pension contributions
- Environmental protection charges
- Excise tax
- Gambling tax
8. Fishing, Hunting and Trapping Dues
Tax Reform and Court Precedents
The great Russian tax reform was undertaken during President Putin’s first term in office in 2001-2002 which saw the emergence of chapter 25 on Profit Tax; chapter 26 on Mineral Extractions Tax; chapter 27 on Sales Tax (later abolished 01.01.2004), chapter 26.2 on the simplified system of taxation for small and medium sized companies; chapter 26.3 on unified imputed Tax; chapter 28 on transport tax; and chapter 29 on taxation of gambling business.
Further reform in years 2003-2005 brought a special system of taxation for production sharing agreements (chapter 26.4) fishing, hunting and trapping dues (Chapter 25.1); unified agricultural tax (Chapter 26.1); Chapter 29 on corporate property tax; on state duty (Сhapter 25.3) and land tax (Сhapter 30).
The previously feared tax police was abolished as of 1.07.2003 and its powers were transferred to Economic Security Department of the Ministry of Interior. There has been further liberalization of the laws concerning taxation, among this the rule that the initiation of criminal investigations in taxation matters may be undertake only after receiving a corresponding case from the tax authority. Russia’s policy in the field of taxation is often changed dramatically. So, introduced in 2011, a rule that criminal proceedings for tax offenses may be brought only after the receipt of the case file from the tax authorities was canceled October 22, 2014.
Earlier, by effect of January 2010, the law was amended so as to exempt from criminal liability first time offences if the subjected first paid the corresponding tax.
By effect from 01.01.2010 the Social tax was abolished and replaced by the system of employer’s social contributions (Employer’s Social Contributions and Employee Social, Medical and Pension Benefit in Russia chapter of the Tax Guide).
In 2011 significant amendments were made to the laws on transfer pricing which aim at approaching the Russian laws closer to international practice. The amendments foresee a gradual tightening of the rules between years 2012 and 2017
One of the striking anomalies of Russian tax laws was addressed by a law withdrawing movable assets from the base of tax on corporate property came into force 01.01.2013 (concerning assets acquired after the date).
As of 30th June, 2013 the Russian law introduced the concept beneficial owner. A beneficial owner is an individual, who ultimately, directly or indirectly (through third parties), owns (or holds a participation of more than 25%) a client (legal entity), or is able to affect a client’s actions. Since then, banks have been required to take measures to identify the beneficial owners of their clients and update this information at least 1 time per year.
Over the past two decades, Russia has achieved some success in developing the Customs Union (consisting of Russia, Belarus, and Kazakhstan) and finally becoming a member of the World Trade Organization (WTO).
The history of the formation of the Customs Union dates back to the CIS countries’ Treaty of 24.09.1993 entitled “On funding of Economic Union”, which expresses the participating countries’ intention to create the Customs Union. This treaty implied that a large number of CIS countries would be included in the new economic space. The next stage was the signing of the Agreement on the Customs Union on 06.01.1995 between the RF and the Republic of Belarus; later, the Republic of Kazakhstan, the Kyrgyz Republic, and Tajikistan acceded to this.
In 1999, the participants in the Agreement on the Customs Union of 1995 entered into the Treaty on the Customs Union and the Unified Economic Space. The most significant changes in the organization’s activity, its goals, and the bodies’ competence, were made via protocols to the above-mentioned treaty in 2006 and 2007. As a result of lengthy negotiations, during the preparation of the draft Customs Union, Kyrgyzstan, Tajikistan, and Uzbekistan withdrew from it for various reasons. This Agreement has been suspended since 01.01.2015 and will be discontinued… The Treaty on Funding of the Unified Custom Territory and Forming of the Custom Union was concluded by and among the RF, the Republic of Belarus, and the Republic of Kazakhstan.
As a result, of the Customs Union came to include three countries: Russia, Belarus and Kazakhstan. One of the most significant results of the Customs Union’s work is putting the unified Customs Code of the Customs Union into effect as from 06.07.2010.
In 2014, the countries of the Customs Union signed the Treaty on the Eurasian Economic Union, which was also joined by Armenia, and an agreement on accession to it by the Republic of Kyrgyzstan was signed, which has so far not entered into force . This agreement is one more step in the integration of countries of the former USSR.
Another step on the road to integration, this time with European countries, is the subsequent accession of Russia to the WTO. On 22.08.2012 Russia entered the World Trade Organization (WTO). As a result of lengthy negotiations, a transitional period was set for the WTO rules to take effect inside Russia, depending on the type of goods for which the rules are valid.
A new special regime of simplified system of taxation is in force from 2013 for certain individual entrepreneurs engaged in certain types of small business activities (Tax Code chapter 26.5). This tax regime is referred to as the system of taxation by license (actually in Russian “taxation by patent”).
Perhaps the most important and significant changes in tax law have happened in the courts. The Russian Constitutional Court and the Supreme Commercial Court have actively through case law in a system that reminds of the precedents of Anglo-Saxon law.
According to the Constitution, the general principles of taxation are determined by federal law, which federal law in this case is the laws incorporated in the Tax Code. Notwithstanding this provision, the Constitutional Court and the Supreme Commercial Court has a wide practice of actively developing principles which cannot be directly identified in statutory laws. Considering the activities of these courts, the Russian law could even be considered to be to a significant level determined and developed through a system of precedents. Although the Supreme Arbitration Court in the process of reform of the judicial system has ceased to exist since August 5, 2014, it appears that the formation of the case law will be continued by the Supreme Court.
The constitutional provisions directly concerning taxation are scarce but the Court frequently refers to more broad categories of constitutional principles. The principles can be divided according to the subjects they are addressed to: lawmaker, courts, (tax) authorities, and taxpayers. Broadly, the principles could be subsumed under two broad categories, one being the principle of a state of justice (or shortly principle of justice), and the other the principle of a bona fide taxpayer. Here the first is chiefly addressed as a guideline for due behavior of lawmaker, courts and authorities and the second as a measure of due behavior of taxpayer.
The Constitutional Court and Supreme Commercial Court practices have developed principles combatting abuse of rights in taxation by means of malicious or antisocial exercise of otherwise legitimate rights.
Typically the expression of these principles distinguish between taxpayers in good faith (“dobrosovestny”) and taxpayers in bad faith (“nedobrosovestny”).
The Constitutional Court introduced the principle of bona fides taxpayer in a resolution of 12.12.1998. In this decision the Court proclaimed that the obligation to pay taxes is to be considered fulfilled from the moment when the bank has executed the transfer of funds from the taxpayer’s bank account. Enforcing payment of the tax a second time would mean an unconstitutional infringement on private property. The background of the case was a situation where the taxpayer had given a relevant payment order to the bank but due to the insolvency of the bank the funds had not finally been remitted to the state budget.
In a later resolution of 25.07.2001 the Constitutional Court confirmed that in tax law the presumption of bona fides taxpayer is valid. At the same time the Court pointed out that the principle according to which the tax liability was considered to be extinguished from moment when bank had accessed the funds in taxpayer’s accounts was valid only in relation to bona fides taxpayers and did not concern mala fides taxpayers. The Constitutional Court later distributed this principle to cover payment of all taxes and levies.
In a much published case of 14.07.2005, the Constitutional Court used the principle of mala fide taxpayer to extend the statute of limitation for tax offences (normally being three years). The taxpayer is denied the protection offered by the statute of limitation if it has resisted or otherwise countered the efforts of tax control by, for example, refusing to submit necessary documents and data or delayed the submission.
The Supreme Commercial Court has chosen to introduce the principle unjustified tax benefit (“neobosnovannaya nalogovaya vygoda”) instead of the principle of mala fide taxpayer.
The anti-abuse principles are also connected with considerations that have to with establishing the business purpose (“delovaya tsel”) and identification of the substance under the form a transaction or a series of transactions are given (often referred to as “form-over-substance” but should more correctly be referred to as “substance-over-form”). According to the business purpose principle, SCC has determined that the aim to reach a tax benefit cannot be regarded as a valid business purpose. According to the substance-over-form principle the courts must not restrict themselves to regarding the form transactions are given but identify the real underlying circumstances and intentions.
The Court has given detailed criteria of what constitutes an attempt to gain an unjustified tax benefit in a resolution of 12.10.2006.
According to the Court, under a tax benefit is meant a reduction of the tax liability as a result of, inter alia, decreasing the tax base, applying a tax deduction, a tax exemption, application of a lower tax rate, as well as obtaining the right to a refund from the budget.
A tax benefit may be considered unjustified particularly in cases where the transactions have not been recorded in accordance with their real economic essence or when transactions have been recorded without regard to any reasonable economic or other good business considerations. A tax benefit cannot be considered justified, if it has been obtained beyond any connection with real entrepreneurial or economic activities.
However, the Court stresses that that the ability to achieve the same economic result with a lower tax burden by other legal means shall not serve to recognize an unjustified tax benefit.
In particular the below listed circumstances may according to the Court serve as evidence of unjustified tax benefits:
- The apparent impossibility of actually having performed the alleged activities considering the time allowed for them, location of assets or volume of material resources that would have been required for actually carrying out the operations
- The lack of the necessary conditions for achieving the alleged results of the business activities considering of the lack of management and technical staff, necessary fixed assets, operating assets, warehouses, vehicles
- The peculiarity that accounting has been done only regarding the transactions that would seem immediately necessary for obtaining the tax benefit, if it normally would be necessary to accomplish and record also other types of operations for the given type of activities
- Undertaking operations with goods which are not produced or could not have been produced in the volumes as recorded by the taxpayer
- The existence of peculiar patterns of calculation of costs and prices as well as peculiar payment terms that point to collusion between parties
At the same time the Court points out that certain types of circumstances cannot be held as such to constitute evidence of an unjustified tax benefit, such are the following:
- setting up a company only shortly before the contested business transactions commenced
- affiliation of parties of the contested transactions
- spasmodic nature of the business transactions
- past tax law violations
- one-time nature of the operations
- carrying out business transactions outside the home location
- settling the transactions between parties within the same bank
- making use of payments of a transit character between related parties
- the use of intermediaries in the implementation of business operations.
However, the Court points out, that the above listed circumstances in combination or together with other circumstances, in particular those that were referred to above as serving as evidence of unjustified tax benefits, may accumulate to evidence of unjustified tax benefits.
The Court also rules that the justification of the tax benefit cannot be dependent on the type of capital uses, equity or debt, new issues of shares and bonds etc.
As a result of reforms in the system of taxation, a whole array of taxes was abolished during the years 2003-2013 namely:
- Securities Issuance Tax (2005)
- Sales Tax (2004)
- Tax on Gifts and Inheritance (2006)
- Tax on Advertisement (2005)
- Tax on resale of cars and computers (2004)
- Tax on construction of production plants in resort areas (2004)
- Registration fee of Individual Entrepreneurs (2004)
- Resort duty (2004)
- Duties on maintenance of the militia, for amelioration works on territory, for education and other aims (2004)
- License fee for right to trade with alcoholic drinks (2004)
- License fee for right to carry out local auctions and lotteries (2004)
- Fee for keeping a dog (2004)
- Fee for right to trade (2004)
- Fee for housing billet (2004)
- Parking fee (2004)
- Fee for right to use local symbols (2004)
- Fee for participation in horse races (2004)
- Fee for gains at races (2004)
- Fees collected from participants at horse races (2004)
- Fee for right to film for television and cinema (2004)
- Fee for cleaning of urban areas (2004)
- Fee for opening of gambling outlet (2004)
- Tax on the purchase of foreign bank bills and payment documents denominated in foreign currency (2003)
- Road Tax (2005)
- Tax on owners of motor vehicles (2003)
- (Unified) Social Tax (2010)
Tax administration and administration of quasi–tax payments (such as employer’s social contributions) are handled by the following authorities:
- The Ministry of Finance;
- The tax authorities: the Federal Taxation Service of Russia (former Ministry for Taxes and Levies) and its territorial subdivisions, which are also referred to as the tax inspectorates;
- The Ministry of Economic Development ;
- Ministry of Labor and Social Development
- The Customs Authorities: the Federal Customs Service and its territorial subdivisions (customs bodies);
- Economic Crime Unit of the Ministry of Interior (until 2011 functioning as Economic Security Department of the Ministry of Interior , which received the competence of the former tax police;
- State non-budgetary funds;
- The Investigative Committee
- Public Prosecutor’s Office ;
The Economic Crime Unit has the right to carry out tax inspections if there are sufficient grounds to suspect a crime. The Economic Crime Unit’s special rights include the right to launch criminal investigations of the financial operations of the taxpayer, the right to tap telephones, intercept correspondence and exercise control over electronic mail (when sanctioned by a court). In investigative activities the Economic Crime Unit is guided by general rules of criminal procedure, which are in equal degree in force for workers of Investigation Committee in the process of investigation of other crimes.
Powers and Obligations of the Tax Authorities
The Tax Code enumerates the powers of the tax authorities in article 31; article 32 contains a corresponding list of obligations of the tax authorities; and article 33 sets the obligations of the officials of the tax authorities. These latter would provide the fundaments for developing principles of due tax administration practices but have not yet received due attention in court practice and therefore remain underdeveloped. In addition to the Tax Code there is still in force the law on Tax Authorities which also contains some provisions concerning the rights of the tax authorities (art. 7). Below table enumerates the main obligations as per these laws.
THE POWERS OF THE TAX AUTHORITY
- To carry out tax audits
- To request from the taxpayers supporting documents in compliance with the legal form
- To seize documents from taxpayers to serve as proof in investigating a tax offence
- To summon a taxpayer for questioning for in connection with probing a taxa matter
- To inspect or examine any production, storage, trading or other premises connected with taxpayer’s activities
- To carry out a stock-take of the taxpayers inventory
- To determine when permissible the tax due by application of the deemed method
- To require the taxpayer to make corrections in tax returns and supporting documents
- To request banks to provide documents confirming payment of taxes by taxpayers and tax agents
- To submit a petition to the relevant authorities to cancel or suspend business licenses
- To recover tax arrears, penalty interest, and fines (from individuals only subject to court ruling)
- To freeze operations on bank accounts (art. 76, Tax Code)
- To seize taxpayer’s assets for securing payment of taxes, penalty interest, and fines (art. 77, Tax Code)
- To levy distress on taxpayer’s assets for settlement of tax debt (from individuals only upon a court ruling; art. 46-48, Tax Code)
- Upon discovering violations the tax authority has the right to apply to a court in matters that go beyond the taxation discipline (art. 31(14) of the Tax Code in the version effective of 2012; art. 7(11) of the Law on Tax Authorities of the Russian Federation of 21.03.1991 (as amended)). For example, tax authority may apply to court for:
- claiming tax arrears, penalty interests, fines
- a claim to bank for compensation of damages to the state or municipality in case of bank wrongfully omitting to withdraw funds о suspension of taxpayer’s operations
- early termination of agreement
- and other cases
Rights and Obligations of the Taxpayers
The Tax Code provides and explicit list of the rights of the taxpayers. These provisions are mainly in article 21 and 81 and are presented in below table.
- To receive from tax authorities, free of charge, information on laws and rules; duties of the taxpayers and powers of the tax authority and its officials; tax reporting forms with advice on how to complete them (art. 21(1(1)
- To receive from the Ministry of Finance and other bodies of the tax authority written explanations or instructions on implementation of taxation laws and rules (art. 21(1(2))
- To receive temporary credit (offsetting) or refund of taxes, penalty interests and fines paid or collected in excess. The tax authorities, hereby, have an obligation to initiate refunds or offsetting ex officio without waiting a request from the taxpayer (arts. 21(1(4) and 21(1(5))
- To take part in hearings, provide explanations and receive copies of tax audit protocols and decisions of the tax authority (arts. 21(1(7) and 21(1(9))
- To appeal against actions (or omission) of tax and other relevant authorities (art. 21(1(12))
- To refuse compliance with any unlawful acts or demands from the authorities (art. 21(1(11))
- To receive compensation for losses caused by unlawful acts, actions and omissions (art. 21(1(14))
- The right to amend a tax return before the deadline for its filing (art. 81(1))
- Exemption from liability provided that the debt is paid together with the Penalty Interest after the expiration of the due time, and the correction is made before the tax authorities have noticed the error or announced a Tax Audit (art. 81(4)).
- The right to take part in consideration of the tax audit reports and other similar decisions of tax authorities (art. 21(1(15)).
- The right to conduct together with the tax authority reconciliations of tax calculations
An open list of a taxpayer’s obligations are found in art. 23 of the Tax Code. Among these we note the obligations to:
- store accounting records for a minimum of 4 years
- report all cases of participation in Russian companies (except for participation in Russian limited liability companies and business associations), as well as all foreign companies, if the share held exceeds more than 10% within one month;
- advise on the establishment of foreign foundations;
- report on controlled foreign companies in respect of which they are the controlling entities;
- announce the opening and closing of separate subdivisions within one month and within three days of a change in the data of separate subdivisions, as well as the closure of separate subdivisions of Russian organizations
The Tax Code (art. 102) qualifies as a tax secret practically any information that has come to the attention of tax and other relevant authorities regarding the taxpayer. In fact, the law separately lists only the data or information that cannot be considered as a aax secret. Some type of data are expressly excluded from the scope of tax secrecy, namely:
- Data in the public domain
- Taxpayer’s identification number (INN)
- Confirmed facts of tax offences and sanctions imposed
- Information exchanged between law enforcement bodies in concordance with international treaties
- Data about taxation provided by a candidate for elections to State Duma.
- Data about payment of state and municipal payments.
In a curious twist of logic the tax secrecy laws have by the tax authority been converted to means of protecting the tax authority against the legitimate interest of the taxpayer to take part of the material in his case. Unfortunately the Supreme Commercial Court has validated this approach in its rulings 21.09.2010 and 28.05.2010, both in the same case.
 The Constitution of the Russian Federation (approved by referendum 12.12.1993) No. 1-FKZ // Code of Russian Laws. 2009. No. 4. Art. 445.
 Art 75 (3) of the Constitution of the Russian Federation (approved by referendum 12.12.1993) // Code of Russian Laws. 2009. No. 4. Art. 445.
 The Russian Federation Tax Code: Part 1 // Code of Russian Laws. 1998. No. 31. Art. 3824 and the Russian Federation Tax Code: Part 2 // Code of Russian Laws. 2000. No. 32. Art. 3340.
 Law of the Russian Federation “On Tax Authorities of the Russian Federation” 21.03.1991 No. 943-1 // The Bulletin of Normative Acts. 1992. No. 1.
 Law of the Russian Federation “Law on Corporate Profit Tax” 27.12.1991 No. 2116-1 // Russian Newspaper. 1992. No. 53.
 Chapter 25.3 of the Russian Federation Tax Code: Part 2 // Code of Russian Laws. 2000. No. 32. Art. 3340
 Federal Law of the Russian Federation “On Custom regulation in the Russian Federation” 27.11.2010 No. 311-FZ // Code of Russian Laws.2010. No. 48. Art. 6252 and Custom Code of the Russian Federation // Code of Russian Laws.2010. No. 50. Art. 6615.
 Federal Law of the Russian Federation “On insurance fees in Pension Fund of the Russian Federation, Fund of Social Insurance of the Russian Federation, Fund of Medical Insurance of the Russian Federation” // Code of Russian Laws.2009. No. 30. Art. 3728.
 Water Code of the Russian Federation // Code of Russian Laws. 2006, No. 23. Art. 2381.
 Federal Law of the Russian Federation “On the Protection of the Environment” 10.01.2002 No. 7-FZ // Code of Russian Laws. 2002. No. 2. Art. 133, Federal Law of the Russian Federation “On subsoil use” 21.02.1992 No. 2395-1 // Code of Russian Laws. 1995. No. 10. Art. 823, Water Code of the Russian Federation // Code of Russian Laws. 2006, No. 23. Art. 2381, Federal Law of the Russian Federation “On Production and Consuming Wastes” 24.06.1998 No. 89-FZ // Code of Russian Laws. 1998, No. 26. Art. 3009 and others.
 Code of Administrative Offences of the Russian Federation // // Code of Russian Laws. 2002, No. 1 (part 1). Art. 1.
 The Criminal Code of the Russian Federation // Code of Russian Laws. 1996. No. 25 (part 1). Art. 2954.
 Civil Procedure Code // Code of Russian Laws. 2002. No. 46. Art. 4532.
 The Commercial Procedure Code of the Russian Federation // Code of Russian Laws. 2002. No. 30. Art. 3012.
 The Russian Constitutional Court has in its resolution 11.11.1997 (Resolution of the Constitutional Court of the Russian Federation 11.11.1997 No. 16-P // Code of Russian Laws. 1997. No.46. Art. 5339) given a definition of the nature of a tax. See also Constitutional Court Resolution 17.12.1996 (Resolution of the Constitutional Court of the Russian Federation 17.12.1996 No. 20-P // Code of Russian Laws. 1997. No.1. Art. 197). Pepelyaev S.G., has defined tax as ‘the sole legally sanctioned form of alienating the assets of individuals and legal entities based on compulsion, individual direct recompense, and irretrievability, backed up by state coercion while not constituting a punishment or contribution, with the purpose of ensuring the solvency of the public authorities’ (Foundations of Tax Law: Textbook / Guidebook, ed. by S.G. Pepelyaev, Moscow .1995. P. 24).
 Resolution of Council of Ministers of the Russian Federation 29.07.1998 No. 857 “On Charter of the Federal Fund of Obligatory Medical Insurance” // Code of Russian Laws. 1998. No.32. Art. 3902, Resolution of Council of Ministers of the Russian Federation 12.02.1994 No. 101 “On Fund of Social Insurance of the Russian Federation” // Russian Newspaper. 1994. No. 35, Resolution of Supreme Council of the Russian Federation 27.12.1991 No. 2122-1 “Questions of Pension Fund of the Russian Federation”// The Bulletin of SPD and SC of RSFSR. 1992, No. 5. Art. 180.
 The most unprincipled legislation // [Electronic resource]. – http://www.rbcdaily.ru – Title of screen.
 Federal Law of the Russian Federation 24.07.2009 No. 213-FZ // Code of Russian Laws. 2009. No. 30. Art. 3739.
 Federal Law of the Russian Federation 05.08.2000 No. 118-FZ // Code of Russian Laws. 2000. No. 32. Art. 3341.
 Agreement on the free (special) economic zones in the customs territory of the Customs Union and the customs procedure of free customs zone // The Bulletin of International Treaties. 2012. No.7.
 Art. 32 (3) of the Russian Federation Tax Code: Part 1 // Code of Russian Laws. 1998. No. 31. Art. 3824 and Federal Law of the Russian Federation 06.12.2011 No. 407-FZ // Code of Russian Laws. 2011. No. 50. Art. 7349.
 Federal Law of the Russian Federation dated 22.10.2014 N 308-FZ N 308-FZ “On Amendments to the Criminal Procedure Code of the Russian Federation // Collected legislation of the Russian Federation. 2014. N 43, Art. 5792.
 Federal Law of the Russian Federation 29.12.2009 No. 383-FZ // Code of Russian Laws. 2010. No. 1. Art. 4.
 Section v.1 of the Federal Law of the Russian Federation 18.07.2011 No. 227-FZ // Code of Russian Laws. 2011. No. 30 (part 1). Art. 4575.
 Federal Law of the Russian Federation 29.11.2012 No. 202-FZ // Code of Russian Laws. 2012. No. 49. Art. 6747.
 Federal Law of the Russian Federation 28.06.2013 No. 134-FZ // Code of Russian Laws. 2013. No. 26. Art. 3207.
 Treaty of CIS Countries “On Funding of Economic Union” 24.09.1993 // The Bulletin of International Treaties. 1995. No. 1.
 Agreement between Council of Ministers of Russian Federation and Council of Ministers of Republic of Belarus “On Custom Union” 06.01.1995 // The Bulletin of International Treaties. 1995. No. 10.
 Treaty on the Custom Union and the Unified Economic Space (signed in Moscow 26.02.1999) // The Bulletin of International Treaties. 2001. No. 12.
 Agreement on the cessation of activities of the Eurasian Economic Community http://www.pravo.gov.ru, 21.10.2014.
 Treaty on Funding of the Unified Custom Territory and Forming of the Custom Union (signed in Dushanbe 06.10.2007) // The Bulletin of International Treaties. 2011. No. 7.
 The Decision of Interstate Council of EAEC 05.07.2010 No. 48 // Code of Russian Laws. 2011. No. 38. Art. 5323.
 Treaty on the Eurasian Economic Union (signed in Astana 29.05.2014) // Official site of the Eurasian Economic Commission http://www.eurasiancommission.org, 05.06.2014
 Agreement of Accession of the Kyrgyz Republic to the Treaty on the Eurasian Economic Union dated May 29, 2014 // SPS. ConsultantPlus.2015.
 The Protocol 16.12.2011 “On Accedence of the Russian Federation to the Marrakesh Agreement on Funding of WTO 15.04.1994” which is ratified by the Federal Law “On Ratification of the Protocol on Accedence of the Russian Federation to the Marrakesh Agreement on Funding of WTO 15.04.1994” 21.07.2012 No. 126-FZ // Code of Russian Laws. 2012. No. 30. Art. 4177.
 Art. 75.3 of the Constitution of the Russian Federation (approved by referendum 12.12.1993) No. 1-FKZ // Code of Russian Laws. 2009. No. 4. Art. 445.
 Resolution of the Constitutional Court of the Russian Federation 12.10.1998 No. 24-P// Code of Russian Laws. 1998. No.42. Art. 5211.
 Resolution of the Constitutional Court of the Russian Federation 25.07.2001 No. 138-О // Code of Russian Laws. 2001. No. 32. Art. 3410.
 Taribo E.V. Doctrines of the Constitutional Court of the Russian Federation in Taxation (Theoretical and Practical Acpects): diss… of cand. of legal sciences. / E.V. Taribo; Russian Academy of Justice. – M., 2005. P. 158-159.
 Ruling of the Constitutional Court of the Russian Federation 01.07.1999 No. 97-O // Code of Russian Laws. 1999. No.31. Art. 4038 and Popova S.S. Constitutional and Legal Principles of Tax System in Decisions of Constitutional Court of the Russian Federation: diss… of cand. of legal sciences. / S.S. Popova; MSU. – M., 2005. P. 86.
 Resolution of the Constitutional Court of the Russian Federation 14.07.2005 No. 9-P // Code of Russian Laws. 2005. No. 30 (part 2). Art. 3200.
 Kuznezov A.A. Tax Legislation Use in Courts’ Bodies Practice (Financial and Legal Aspects): diss… of cand. of legal sciences. / A.A. Kuznezov; Russian Academy of Governmental Service. – M., 2005. P. 128.
 Borisova O.V. Legal Opinions of the Constitutional Court of the Russian Federation: diss… of cand. of legal sciences. / O.V. Borisova; Stavropol State University, 2007. P. 178-179.
 Borisova O.V. Legal Opinions of the Constitutional Court of the Russian Federation: diss… of cand. of legal sciences. / O.V. Borisova; Stavropol State University, 2007. P.179.
 Borisova O.V. Legal Opinions of the Constitutional Court of the Russian Federation: diss… of cand. of legal sciences. / O.V. Borisova; Stavropol State University, 2007. P.154, 164-165, Kuznezov A.A. Tax Legislation Use in Courts’ Bodies Practice (Financial and Legal Aspects): diss… of cand. of legal sciences. / A.A. Kuznezov; Russian Academy of Governmental Service. – M., 2005. P. 72, Decision of Moscow Commercial Court 05.08.2011 No. 40-1164/1199-7 // [Electronic resource]. – 2011; the Supreme Commercial Court of the Russian Federation. – Mode of access: – http://www.arbitr.ru – Title of screen, Resolution of Presidium of the Supreme Commercial Court 15.11.2011 No. 8654/11 on case No. А27-7455/2010 // [Electronic resource]. – 2011; the Supreme Commercial Court of the Russian Federation. – Mode of access: – http://www.arbitr.ru – Title of screen.
 Resolution of Plenum of the Supreme Commercial Court of the Russian Federation 12.10.2006 г. No. 53 // The Bulletin of the Russian Federation Supreme Commercial Court. 2006. No. 12 and Vlasenko L.V. Legal Opinions of Courts in Tax Law: diss… of cand. of legal sciences. / L.V. Vlasenko; Russian Academy of Justice. – M., 2011. P. 139.
 The Criminal Procedure Code // Code of Russian Laws. 2001. No. 52 (part 1). Art.4921.
 Ruling of the Supreme Commercial Court of the Russian Federation 21.09.2010 No. 12980/10 // [Electronic resource]. – 2010; the Supreme Commercial Court of the Russian Federation. – Mode of access: – http://www.arbitr.ru – Title of screen.
 Decision of the Supreme Commercial Court of the Russian Federation 28.05.2010 No. VAS-4281/10// [Electronic resource]. – 2010; the Supreme Commercial Court of the Russian Federation. – Mode of access: – http://www.arbitr.ru – Title of screen.