Tax & Law Services
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Tax controversy and dispute resolution
Globalization, changing business processes and the need to ensure an effective revenue stream for the government are the factors that force the tax authorities not only to review their current approaches to tax administration, but also to re-examine their relations with the business community.
68% of respondents report that they feel tax authorities globally have increased their focus on cross-border transactions*
In recent years, tax authorities have reconsider the way they prepare and implement tax control measures, established effective information exchange between government stakeholders both within and outside Russia and come up with systematic approaches to assessing the tax implications of cross-border and industry-specific transactions in line with international practices and OECD recommendations. The competencies of tax administrators as well as the quality of tax audits have improved considerably.
These developments have led to more tax disputes resulting in an outcome which is difficult to predict. There are high chances that this trend will remain in the future amid a change in law enforcement practices and tax legislation.
Therefore, in the event of tax disputes it is especially important for the taxpayer to properly build relationships with tax authorities and to protect themselves from possible reputational and financial risks associated with claims of tax authorities.
Having no experience, it will be rather difficult for the taxpayer to achieve the intended effect: special nature of tax disputes is such that the tax authority has some advantage over the taxpayer due to the possibility to use a wide range of administrative powers of tax control, while most taxpayers face tax disputes only occasionally.
It is therefore convenient to entrust the settlement of tax disputes to specialists who are frequently involved in communication with the tax authorities and know their approaches to transaction review, collection of evidence and carrying out tax control measures, and can effectively contest their assessments.
We offer a broad range of services — from preventing tax disputes to supporting clients in dispute resolution at all stages, from administrative appeals to judicial proceedings.
EY’s tax controversy and dispute resolution services.
Are you ready for a tax audit?
69% of respondents state that tax audits had become more aggressive and less predictable*
Preparing for a tax audit early and properly will help avoid unreasonable claims and, hence, a dispute with tax authorities. We will assess and identify your tax exposures using the same tools and approaches as those used by tax administrators.
Following our brief audit, you will have a true picture of your potential tax risks and will be able to take immediate corrective actions.
Are you facing a tax audit?
74% of respondents say they feel that tax administrators are now challenging existing structures, which were not previously challenged*
Even if you are already facing a tax audit, do not take inconsistent decisions: you can still avoid major errors, which may lead to additional assessments. To do this, it is necessary to work out the correct model of interaction with tax authorities during the tax audit and build relationships with them as efficiently as possible.
Do you disagree with tax audit findings?
Once you get a report describing violations discovered by tax officers it is critical that you clearly understand both your rights and the obligations of the tax authority in order to effectively protect your interests.
As part of out-of-court mediation, we will help the client to collect supporting evidence, formulate a legal position on claims raised by the tax authority and draft a statement of objections to the tax audit report. We will represent you in discussions with tax officers and will draft an appeal to higher tax authorities, including the Federal Tax Service (if required).
During this process, we will help you to pursue a constructive dialogue with the tax authorities, identify the scope of disagreements and major disputed issues, and assist in mutual agreement procedures so that the dispute does not make it to court.
If, after all the required administrative appeals procedures have been exhausted, the taxpayer disagrees with the position of the tax authority, it can assert its rights and lawful interests in court.
EY has a considerable experience of supporting clients in contesting tax authorities’ decisions, extensive experience in litigation and enforcement proceedings, and unique knowledge of tax law, combined with industry-specific knowledge of challenges faced by clients from across the entire industry. All of the above allows EY to successfully defend the interests of our clients in court. With our support, 95% of disputes with tax authorities were settled in favor of our clients.
We also provide other services, including the following:
- Revision of court judgments upon discovery of new facts or evidence after the judgment has been enforced
- Services related to enforcement proceedings and execution of judgments
- Reimbursement of representation costs and other litigation costs
- Criminal tax litigation
The EY difference
We have tremendous experience in resolving tax disputes over both cross-border and domestic transactions. We will successfully protect your rights in any tax disputes, including those relating to the following:
- Applying reduced tax rates or tax reliefs under double tax treaties
- Confirming the status of the beneficial owner
- Applying thin capitalization rules and reclassifying interest to dividends
- Operations of a foreign representative office in Russia
- Economic justification and documentary evidence of various costs for income tax purposes
- Determining the tax period to which income and expenses relate
- Limitation certain types of expenses
- Due care in the selection of counterparties
- Refund or deduction of input VAT
- Pricing of controlled transactions for tax purposes
- Performing tax agent’s functions
- Requalification of transactions
Specialist practice groups and industry expertise
Advising our clients, we consider their industry specialization and involve specialists of various service lines, which ensures the high quality of our services.
* EY’s 2014 Tax Risk and Controversy Survey
+7 (495) 705 9730
Experienced team of professionals with unique knowledge, combined with focused specialization and industry-specific knowledge. With EY support, more than 100 tax disputes were settled in Russia over the past two years, 95% of disputes – in favor of our clients. Learn more.
Tax steps into the light
Learn more from EY’s 2017 Tax Risk and Controversy Series.
Alexandra Lobova, partner, and Alexei Nesterenko, partner, were named among the best Tax Controversy Experts in Russia in 2017 by International Tax Review.
Vladimir Kotenko, partner, was named among the best Tax Controversy Experts in Ukraine in 2017 by International Tax Review.
Read our latest alerts on the tax and law regulations and other developments in Russian tax and law.