The Supreme Court of Russia upheld the decisions of the lower courts regarding case No. A40-153792/2014 on 2nd November 2015. The Court stated that a newly established company (LLC “SU-91 Injstroyset” (LLC)) which is related to a taxpayer (ZAO “SU-91 Injspetsstroy” (ZAO)) should be responsible for the taxpayer’s taxes due in circumstances where the entire business of the taxpayer (ZAO) was transferred to the related party (LLC) in order to avoid tax.
According to section 2 of article 45(2) of the Tax Code taxes due for more than 3 months by a company can be claimed through a judicial process from its related party where that related party receives proceeds from the sale of goods (works and services) due to the other company.
Furthermore, the Court held that the transfer of the entire business of ZAO to LLC after the decision of the tax authorities had been issued did not have any sound economic reasons. The Court ruled that this was performed exclusively for the purpose of continuing ZAO’s activities through a new company with the same address, contact details, website and type of activities, but incorporated in a different legal form and registered with a different tax authority, which had been created to avoid payment of the tax due by ZAO.
The Court also found that at the time the tax authorities filed an appeal to the Lower Arbitration Court all available means for collecting the tax due to them had been used.
