The interdistrict tax inspection of the Khabarovsk Territory classified as real estate the carpentry equipment and kiosk-type transformer substations belonging to the bankrupt Arkaim company from Khabarovsk. As a result, the inspection imposed on the company additional taxes for 2020 in the amount of 7.5 million rubles and penalties in the amount of 1.6 million rubles. and a fine for non-payment of property tax – 375.3 thousand rubles.
Arkaim’s bankruptcy trustee managed to challenge the amounts and reduce the arrears to 4.2 million rubles and the penalties to 920 thousand rubles. and a fine of up to 210.7 thousand rubles. The inspection assessed additional disputed amounts of taxes, penalties and fines and determined that the equipment was illegally excluded from the corporate property tax base. This decision was made because the objects declared as movable property were part of a single real estate complex, which made them real estate.
The trial court disagreed with the tax inspection and indicated that the woodworking equipment and transformer substations were purchased at different times and were located on different plots of land. Furthermore, the court considered that the disputed objects could be dismantled without significant damage. Therefore, the taxpayer legitimately classified them as personal property.
However, the court of appeal overturned this decision due to the lack of documents confirming that the specified objects are movable property. The court of cassation supported the conclusions of the court of appeal. By appealing to the Supreme Court, Arkaim’s bankruptcy trustee managed to appeal the decisions of the courts of appeal and cassation and found them illegal. Thus, according to the conclusions of the Economic Disputes Chamber of the Supreme Court (SC), published on October 10 in the operative part of the court’s ruling, the equipment is not real estate and should not be subject to taxes.
According to the vice-president of the “NP OPORA” Association, Boris Fedosimov, the position expressed by the Supreme Court will put an end to a significant number of disputes between taxpayers and tax authorities over the classification of certain objects as real estate. completely stop these types of disputes. The director of the Business Russia think tank on criminal legal policy and execution of judicial acts agrees with him. Ekaterina Avdeeva “There is no jurisprudence in Russia, and in each specific case a specific court makes a decision based on specific circumstances,” the expert recalled.
The position of the high court in this case is based, among other things, on accounting standards, according to which work machines and equipment are identified as a separate type of fixed asset subject to accounting, different from real estate. As Fedosimov notes, a significant part of disputes between tax authorities and taxpayers over the classification of real estate do not concern equipment. For example, there are also disputes over power lines and stationary conveyors.
Until now, in police practice there are conflicts that show that assets that are not classified as real estate by civil law are classified by tax authorities as real estate. Situations may also arise where two identical units of property are classified as real property and the other as personal property. Fedosimov sees the solution to this problem by amending the legislation.
“It is necessary to legislate more understandable criteria to classify this or that property as real estate specifically for tax purposes,” noted the expert, referring to the Supreme Court’s indication in the case of the Arkaim company that the taxpayer has the right to know exactly what consequences The investment process will have tax obligations, and (the taxpayer) will not have to face tax uncertainty.
According to Avdeeva, the Supreme Court’s decision will be taken into account by lower courts and will also serve as an additional argument to the defense arguments. However, one should not expect that now the courts, in disputes over the classification of a property as real estate, will focus on its registration as a single real estate complex. The Federal Tax Service in its work has long been based on the principle of the actual purpose of a transaction or property. “Therefore, the tax authorities will continue to classify unified real estate complexes as real estate, regardless of their registration in the Unified State Real Estate Register and it can be assumed that in disputes with entrepreneurs, the courts will often continue to take sides . of the tax authorities,” explained the expert.
