THE SUPREME COURT ALLOWED TO MAKE MISTAKES IN THE AMOUNT OF THE LOSS IN THE TAX RETURN

The Company appealed to the court with a demand to challenge the decisions of the tax service on additional tax assessment (case no. A12-27717/21). During the implementation of the investment project by the applicant, the company created infrastructure facilities to meet the needs of employees.

The tax service attributed these objects to service industries and farms (OPH).

In its declarations, the company reflected a loss due to depreciation of objects. However, the tax service considered that for all objects of service industries, the enterprise, if there were expenses in the periods under review, had no income from activities related to the use of these objects, and added tax.

The courts of three instances refused to challenge the inspection acts, agreeing with the conclusion of the tax authority on the company's non-compliance with the conditions, rules on determining the tax base for OPH facilities and allowing to take into account the resulting loss when carrying out activities related to the use of service facilities.

The Supreme Court referred the dispute for reconsideration and pointed out that the erroneous reflection of the disputed amounts of expenses in the section of the corporate income tax declaration relating to the determination of the tax base for facilities serving production and agriculture (OPH), in itself cannot serve as a basis for a complete refusal to account for these expenses. Especially if the explanations and documents received from the company are enough to come to a conclusion about the correct qualification of expenses and determine the amount of tax liability.

Thus, the Supreme Court confirmed that taxpayers may not be afraid to incorrectly reflect losses in their declarations, because the tax authorities will not have the right to make additional charges if the amount of the calculated tax can be reliably determined from the explanations of the organization.

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