Kutafin University Law Review


In issue 1 on 2016 year

COMBATING AN UNJUSTIFIED TAX BENEFIT IN THE RUSSIAN FEDERATION

DOI: 10.17803/2313-5395.2016.1.5.185-197

Author: Sergey Sergeev (Russia)

Rubric: HUMANISTIC VALUES IN LAW

Annotation: Realizing the need to compensate for the lack of statutory provisions combating abusive taxpayer’s practices the Constitutional Court of the Russian Federation introduced the new concept of ‘taxpayers’ conscientiousness’ (integrity.) The concept was evaluative by nature and failed to provide an effective practical treatment of the problem. It strongly enhanced the position of tax authorities and injured the interests of taxpayers. This legal deficiency was improved by the High Arbitration Court in its Regulation № 53 of 12 October 2006 ‘On Assessment by Arbitration Courts of Justifiability of Tax Benefit Obtained by the Taxpayer’. Analyzing the newly introduced concept of ‘justifiable tax benefit’, some legal scholars distinguish such validity tests as business purpose doctrine, due circumspection doctrine and substance over form doctrine. As a rule those doctrines are applied by tax authorities either in combinations or separately. Since those doctrines are of general nature, they can be applied to many cases. The present article investigates the definition and main features of unjustified tax benefit. What’s more, it will also cover extensive judicial practice. Such legal means can be found not only in Russia but also in a number of foreign countries both in legislation and in judicial practice. This article will handle the German and American counterparts of unjustified tax benefit concept.


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Keywords: Taxation, unjustified tax benefit, tax abuse, tax benefit, tax relief, taxpayers’ integrity

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