Oil Plant’s VAT Income Unjustified, Arbitration Court Claims

Sverdlovsk Region Arbitration Court admitted that the tax authorities’ claims against OAO Oil Plant are well grounded.

The Interregional division of Russia’s Federal Tax Service for Sverdlovsk Region’s largest taxpayers carried out an in-house tax audit of the plant’s VAT declaration. The results of the inspection were presented in the Act dated July 28, 2011; after the report had been studied and the taxpayers’ claims accounted for, it was decided to reject the demands to make the plant face tax liability and not to allow the tax deduction option in what regards the tax declaration for the first quarter of 2011 (the amount in question was 1.79m RUR).

Sverdlovsk Region division of Russia’s Federal Tax Service supported the earlier rulings. As Oil Plant disagreed with these decisions, the enterprise took the case to arbitration court.

‘The fact that the contractor, who had no money or resources to do any work whatsoever, dealt in advertising services proves that the applicant did aim to obtain ungrounded tax relief,’ the court stated.

‘Taking all of the above into consideration, the court believes that the tax authorities have managed to prove the fact that the company had obtained ungrounded tax benefits,’ the judge ruled and rejected the plant’s claim against Russia’s Tax Service.

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