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INFORMATION LETTER OF PRESIDIUM OF THE SUPREME ARBITRATION COURT OF THE RUSSIAN FEDERATION

of November 17, 2011 No. 148

The presidium of the Supreme Arbitration Court of the Russian Federation considered the Overview of practice of permission by Arbitration Courts of the cases connected using separate provisions of Chapter 30 of the Tax Code of the Russian Federation and according to article 16 of the Federal constitutional Law "About Arbitration Courts in the Russian Federation" informs Arbitration Courts on the developed recommendations.

Appendix: the overview on 20 l.

Chairman of the Supreme Arbitration Court of the Russian Federation

A. A. Ivanov

The overview of practice of permission by Arbitration Courts of the cases connected using separate provisions of Chapter 30 of the Tax Code of the Russian Federation

1. If the body of the legislative (representative) or executive authority is registered as the legal entity (organization) and the property recognized according to article 374 of the Tax Code of the Russian Federation the taxation object on property of the organizations is assigned to it on the right of operational management, the specified body is payer of the called tax.

The "Council of the Municipality of the Rural Settlement" local government office (further - council of the rural settlement) appealed to Arbitration Court with the application for cancellation of the decision of tax authority on attraction it to tax responsibility for non-presentation at the scheduled time of the tax declaration on the property tax of the organizations.

According to tax authority, the body of the representative authority of the municipality registered as the legal entity - organization, is payer of the called tax therefore shall represent to tax authority the corresponding tax declaration concerning the property which is not municipal treasury.

The Trial Court met the requirement of the applicant, having specified the following.

Case papers demonstrate that council of the rural settlement is the representative body of local self-government performing public functions on behalf of the municipality. The property of council of the rural settlement, in particular the car, furniture and the computer equipment which is in municipal property is used by council of the rural settlement only for implementation of the public functions determined by the charter of the municipality.

With respect thereto it is necessary to consider that the fact of registration of bodies of the legislative (representative) or executive authority as legal entities (organizations) is not the basis for recognition by their taxpayers on property of the organizations as all activities of data of bodies consist only in accomplishment of public functions on behalf of public legal entity which cannot be considered as the taxpayer.

The called bodies are not the independent participants of legal relationship having any own, including economic, the interest other than interest of the corresponding public legal entity. The property of such bodies is not used for the purpose of extraction of any own benefit that is the economic basis of collection of the property tax of the organizations. Therefore, legal basis to recognize behind bodies of the legislative (representative) or executive authority availability of the independent tax status is not available.

Considering stated, the Trial Court recognized the decision of tax authority on involvement of council of the rural settlement to responsibility invalid.

The Appeal Court cancelled resolution of the Trial Court, refused satisfaction of the declared requirement in view of the following.

Owing to Item 1 of article 373 of the Tax Code of the Russian Federation (further - the Tax Code of the Russian Federation, the Code) all legal entities having the property recognized by the taxation object according to article 374 Tax Code of the Russian Federation are taxpayers on property of the organizations. Council of the rural settlement is registered as legal litsauchrezhdeniye that is confirmed by the extract from the Unified State Register of Legal Entities. At the same time the property assigned to it on the right of operational management and considered according to the legislation on financial accounting on balance as fixed assets is recognized the taxation object on property of the organizations.

Therefore non-presentation of the rural settlement of the tax declaration by council in time, stipulated in Item 3 articles 386 Tax Code of the Russian Federation, is tax offense and attracts responsibility, stipulated in Item 1 article 119 of the Code.

Due to stated the decision of tax authority on involvement of council of the rural settlement to tax responsibility is lawful.

The court of cassation instance upheld the court order of appellate instance.

2. In case of acquisition in property of real estate objects the acquirer becomes taxpayer on property of the organizations irrespective of availability of state registration of transition of the property right as owing to the legislation on financial accounting such registration is not specified among compulsory provisions of accounting of the corresponding objects on balance as fixed assets.

The limited liability company (further - society) appealed to Arbitration Court with the application for cancellation of the decision of tax authority on additional accrual of the property tax of the organizations and recovery of penalty, stipulated in Item 1 article 122 Tax Code of the Russian Federation.

Objecting to the declared requirement, the tax authority referred to the fact that in defiance of Item 1 of article 374 of the Code and the Accounting regulation "Fixed asset accounting" PBU 6/01" (further - PBU 6/01) society did not consider the certain real estate acquired according to purchase and sale agreements and which was actually used in business activity as a part of fixed assets until state registration of transition of the property right to this property. Respectively, the tax base on the called tax was underestimated.

Trial Court, refusing satisfaction of the declared requirement, specified the following.

Proceeding from Item 1 of article 374 Tax Code of the Russian Federation the taxation object on property of the organizations the personal and real estate considered on balance of the organization as fixed asset objects according to established procedure of conducting financial accounting is recognized.

The accounting treatment for fixed assets is established by PBU 6/01, according to item 4 of which the basis for statement of property on balance as fixed assets object compliance to the conditions listed in this Item is. Among these conditions availability of state registration of transition of the property right to real estate objects is not specified.

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