A construction company approached PRESIDENT CONSULT seeking protection of its interests within the framework of the decision passed by a certain taxation body on holding this company tax liable.

The tax body regarded illegal an allocation of the loss expressed as the difference between the financing received from the investors as payment for the ownership title of the real-estate by residential certificates and expenses incurred for construction into the non-sale expenses, to the cost of production. The tax inspection resolved that an additional profit tax is to be accrued, and relevant fines and penalties are to be imposed.

The specialists of our firm contested the decision of the tax authority in the arbitration court and simultaneously succeeded in adopting injunctions that banned the tax authority from any writing off of any outstanding amounts and fines from the bank account of the construction company. Our lawyers brought significant arguments in court proving the legitimacy of the actions taken by our client based on the analysis of the tax legislation and court practice on tax disputes including court decisions of the Constitution Court of the Russian Federation.

The Court supported the position of our client; and the decision of the tax authority was recognized as invalid in three court instances.