Tax planning

Tax planning

The tax planning (complex services provided by FORPOST Legal Consulting Firm in the terms of tax consulting) means the unique developments by experts in various fields of law. The experience accumulated and systematised by our experts and careful studies of the provisions of the current laws and law-enforcement practice enable us to offer our complex solutions for optimisation of taxation.

The tax planning means a set of legal targeted actions by taxpayers with respect to application of their legal approaches and methods as well as all the legally provided facilities and exemptions for the purpose of minimisation of the tax obligations. The judicial practice confirms the given conclusion. The tax planning objective is to enable a taxpayer to pay the minimum possible amount of taxes for the maximum possible period in compliance with the laws (simply speaking, tax planning).

Therefore, the major objective of the tax consultant is to find the best way of tax optimisation for the client within the terms of the current laws. With the individual approach to each client, the experts of FORPOST Legal Consulting Firm offer the complex solutions for minimisation of the tax expenses.

Optimisation of taxation: complex solution.

The optimisation of taxation assumes the complex system of relations with taxpayers (tax consulting), which enables us, in compliance with the provisions of the Tax Code of Russian Federation, to minimise the tax obligations of legal entities in the course of their business.

The necessity of this complex approach to the tax planning is determined by the major objective of each client: to minimise the corporate tax burden. Taking into consideration the given objective, the experts of FORPOST Legal Consulting Firm offer the full range of works for analysis of the current situation, development and implementation of the optimum scheme minimising taxation.

Major tax planning tools:

• corporate accounting policy;
  
• special tax modes;
  
• judicial precedents;
  
• tax facilities;
  
• facilities prescribed by the international treaties for avoidance of double taxation;
  
• optimum schemes of mutual contractual relations;
  
• explanations of financial department;
  
• creation of reserves, etc.

In the terms of this complex approach to the tax planning, FORPOST Legal Consulting Firm offers the following services:

• preliminary estimation of tax consequences in the course of business;
  
• development of versions of point changes (effective solutions of local problems to yield substantial results in general) in the taxpayer's business on the basis of application of the methods and approaches prescribed by the tax laws for the purposes of legal minimisation of corporate tax obligations;
  
• adaptation of the approved tools developed on the basis of the tax laws and judicial practice by the lawyers of FORPOST Legal Consulting Firm with respect to the specific features of the certain taxpayer;
  
• forecast of the law-enforcement practice in the future periods; and
  
• consultations on all the aforementioned issues.
  

Miscellaneous tax consulting matters.

FORPOST Legal Consulting Firm helps the clients also to settle any other matters, which are not less important but related to tax consulting, as follows:

• consultations on the current operations of taxpayers and changes in the tax laws;
  
• assistance in settlement of tax conflicts (tax arbitration);
  
• service for clients in the period of preparation to the visiting tax audit and in the course of the visiting tax audit to be carried out by the tax authorities, preparation of objections and participation as the client's representative in the said procedures;
  
• legal expertise of any actions and regulatory acts of the tax authorities;
  
• appeal against any resolutions by the tax authorities with respect to the acts of audit, appeal against any illegal actions (omissions) by any officers of the tax authorities;
  
• repayment (refund) of taxes from the budget;
  
• consultations for filling in the tax declarations; and
  
• tax consulting on any other matters.

Probably, section Tax Planning: Simply Speaking will be able to clarify further the matters related to tax optimisation and consulting, and taxation planning.

Tax planning (tax consulting): legal basis

By October 2006, the tax authorities considered any application of corporate tax planning as tax unfairness. However, the Plenary Session of the Russian Federation Highest Court of Arbitration confirmed possibility of legal tax planning, and the given position was described in Directive No. 53 dated October 12, 2006 by the Plenary Session of the Russian Federation Highest Court of Arbitration for estimation by courts of arbitration on grounds of tax facilities granted to taxpayers (hereinafter referred to as the "Directive").

In particular, Paragraph 4 of the said Directive specified that potential achievement of the same economic results with the lower tax profit gained by the taxpayer by execution of other operations, which may be prescribed or not prohibited by the law, does not serve the grounds for recognition of the said tax profits as unreasonable. Therefore, the taxpayers are entitled to use any legally prescribed opportunities for minimisation of the own tax burden.

Moreover, the said Directive determined the number of circumstances, which may evidence or not the unreasonable tax profits gained by the taxpayers.

At the same time, Paragraph 4 of the said Directive specified the list of circumstances, which enable the judges to make a conclusion of unreasonable tax profits gained by the taxpayers. These circumstances are as follows:

• impossible real execution of the said operations by the taxpayers, taking into consideration the time and place of the property or volume of material resources, which are economically necessary for manufacture of any goods, production of any works, or provision of any services;
  
• absence of the necessary conditions for achievement of the results of the relevant economic activities due to the lack of administrative or technical personnel, fixed assets, industrial assets, warehouse premises, and transport facilities;
  
• registration for taxation purposes only of those business operations, which are directly related to the arising tax profits if the given activities may also require execution and registration of other business operations; and
  
• execution of operations with any goods, which were not manufactured or could not be manufactured in the amount specified by the taxpayer in the accounting documents.
  

Therefore, one or another judgement in the certain situation is made by the court, but the objective of the tax consultant is to take into consideration all the potential trends in development of events and to create the optimum scheme, which is generally based on compromise.