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10.5. Lawful Tax Planning or Tax Evasion: the Limits of Administrative Reassessment of Business Decisions

Thursday, May 16
09:30 - 11:00

Hall #6, General Staff Building (6-8, Dvortsovaya sq.)

From 2012 to 2018 taxes withdrawn from the economy (VAT and profit tax) grew 30 times faster than the economy. Russia's Federal Tax Service explains this by the quality of tax administration and 'new business entities involved in legal circulation'. These reasons alone cannot explain the dramatic disproportion.

Court statistics confirm that most additional assessments rely on the unjustified tax benefit concept (88% of judgements in such cases favoured tax authorities).

Anti-evasion rules, abstract and flexible, leave enforcers broad room for a discretionary approach. In countries of such rules' origin a controller’s discretion is balanced with a reliable pre-court settlement system for tax disputes, and a high reputation of an independent court. Scholars’ opinion is also taken into account, and such rules are applied in exceptional cases.

In Russia, as prominent tax lawyer A.A. Ivanov estimates, tax law rules letting tax obligations change at a tax authority’s discretion have reached 10% of the general part of the Tax Code.

All this is set against an abrupt decline in people’s institutional trust, including trust in the legislature.

What legal approaches should be applied to check for any 'unjustified tax benefit'?

Issues in focus in the discussion:

  1. 'Formal document flow': a legal concept or a label?
  2. Business or tax purposes of a transaction: is competition acceptable?
  3. Business purpose of a transaction or a way to achieve it: what is assessed in practice?


Sergey Pepeliaev

Managing Partner, Pepeliaev Group


Valentina Akimova

Partner, Pepeliaev Group

Kurt Demeyere

Counsel – Tax Lawyer, Mythra

Natalya Pavlova

Judge, The Supreme Court of the Russian Federation

Aleksey Ryabov

Head of Legal Department of Presidential Commissioner for Entrepreneurs’ Rights

Natalya Sheveleva

Head of the Department of Administrative and Financial Law, Saint Petersburg State University

Danil Vinnitskiy

Professor – Head of the Financial Law Department of the Ural State Law University, Director of the BRICS Law Institute

* The Programme may be subject to change