Russian Supreme Arbitration Court Directs to Keep Losses Documents for 10 Years

Russian Supreme Arbitration Court Directs to Keep Losses Documents for 10 Years

Presidium of the Supreme Arbitration Court (SAC) of Russia made a new precedent with its resolution № 3546/12 as of July 24, 2012 for the case of State Air Transport Organizing Corporation and Federal Tax Authority Moscow department.

In 2010 Federal Tax Authority imposed additional tax in the amount of RUR 4,95 mln on the Corporation’s income for the tax year 2006. The Corporation did not pay that tax, reducing the income by the loss appeared due to other company takeover. However, tax authority did not agree with that for the Corporation did not provide the documents confirming the amount of losses made in 2005.

The Corporation challenged tax authority’s decision in the courts of three instances successfully, pointing out there was no liability to provide the documents confirming that loss (according to subclause 8, clause 1, article 23 of Russian Tax Code, the period of documents keeping is 4 years). Tax authority claimed for case consideration by Presidium SAC of Russia, appealing to clause 4, article 283 of Russian Tax Code which states the accounting documents confirming the amount of the losses made to be kept for whole period of losses deducting.

In the end Presidium of SAC cancelled all three instances courts decisions and pointed out in such case just the accounting documents confirming the fact and amount of losses to be provided (tax declarations for 2005 presented by the taxpayer were not accepted as losses confirmation documents).

The above resolution of Presidium of SAC changes the previous court practice where courts took sides of taxpayers, and that means for deduction of losses in future periods taxpayers must keep the accounting documents related with these losses for 13 years: 10 years as a maximum term of losses deduction in future periods plus 3 years in case of field tax inspections.

The text of the Presidium of SAC resolution № 3546/12 as of July 24, 2012 is available here.

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