RusBankrot
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17/11/2024
Sunday
THIS DAY IN HISTORY:
17 November 
1970 Russian Orthodox Church broke off relations with the Episcopal Church of the United States, where a homosexual was ordained a bishop.
1970 The mausoleum of Lenin / Stalin was opened in Moscow.
1970 The "Aurora" cruiser made an eternal stop at the Petrogradskaya embankment.
17 November
1970 Russian Orthodox Church broke off relations with the Episcopal Church of the United States, where a homosexual was ordained a bishop.
1970 The mausoleum of Lenin / Stalin was opened in Moscow.
1970 The "Aurora" cruiser made an eternal stop at the Petrogradskaya embankment.
INDIVIDUAL LENDERS WERE ORDERED TO PAY PERSONAL INCOME TAX WITH INTEREST
On October 24, 2024, the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation issued a precedent-setting decision concerning the taxation of interest on loans issued by individuals (case No. A40-147367/2023). According to him, the interest received by citizens from such loans should be taxed on personal income (personal income tax), and not on professional income, as previously assumed.
The initiator of the consideration of the issue was the company Avtobaza-M, which appealed to arbitration with a complaint against the decision of the tax authorities (MI FTS No. 35), issued in April 2023. The dispute began with the fact that in 2019, the CEO of the organization Dmitry Molodtsov borrowed 3 million from the company at 30% per year. Later, another loan of 1.25 million was granted on the same terms.
In the early years, the organization (the borrower) withheld personal income tax from the interest received by its head (the lender). But since the beginning of 2021, he switched to paying professional income tax, having stopped paying personal income tax. The fiscal authority considered this a way to reduce the tax, additionally adding penalties and tax to the carpool.
The firm complained to arbitration, where its claims were satisfied in September 2023. The appeal (the Ninth Arbitration Court of Appeal) in January 2024, and then the cassation (the Arbitration Court of the Moscow District) in May 2024 left the court's act unchanged. The courts have pointed out that a tax on professional income can be applied to income from interest.
The Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation decided otherwise. The Board pointed out the difference between passive and active incomes of individuals. For taxation within the framework of the professional income tax, the judges considered that income from interest on the loan is not suitable. Such income is passive, that is, it is not related to the results of the provision of services, the fulfillment of contractual obligations or the transfer of any property rights.
Experts believe that this case is one of the first to be considered by the Supreme Court of the Russian Federation on taxation issues for self–employed citizens. This case may set a significant precedent for judicial practice. When the tax on professional income was introduced, the state tried to legalize the income of the population, which is difficult to control. First of all, it was about work, not about interest on loans provided.
In 2021, the Ministry of Finance of the Russian Federation seems to have allowed the possibility of using a tax on professional income for such a purpose. But by the end of 2021, officials had changed their minds. In 2023, this position was officially confirmed. This is exactly what was reflected in the verdict of the judicial board on economic disputes.
The initiator of the consideration of the issue was the company Avtobaza-M, which appealed to arbitration with a complaint against the decision of the tax authorities (MI FTS No. 35), issued in April 2023. The dispute began with the fact that in 2019, the CEO of the organization Dmitry Molodtsov borrowed 3 million from the company at 30% per year. Later, another loan of 1.25 million was granted on the same terms.
In the early years, the organization (the borrower) withheld personal income tax from the interest received by its head (the lender). But since the beginning of 2021, he switched to paying professional income tax, having stopped paying personal income tax. The fiscal authority considered this a way to reduce the tax, additionally adding penalties and tax to the carpool.
The firm complained to arbitration, where its claims were satisfied in September 2023. The appeal (the Ninth Arbitration Court of Appeal) in January 2024, and then the cassation (the Arbitration Court of the Moscow District) in May 2024 left the court's act unchanged. The courts have pointed out that a tax on professional income can be applied to income from interest.
The Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation decided otherwise. The Board pointed out the difference between passive and active incomes of individuals. For taxation within the framework of the professional income tax, the judges considered that income from interest on the loan is not suitable. Such income is passive, that is, it is not related to the results of the provision of services, the fulfillment of contractual obligations or the transfer of any property rights.
Experts believe that this case is one of the first to be considered by the Supreme Court of the Russian Federation on taxation issues for self–employed citizens. This case may set a significant precedent for judicial practice. When the tax on professional income was introduced, the state tried to legalize the income of the population, which is difficult to control. First of all, it was about work, not about interest on loans provided.
In 2021, the Ministry of Finance of the Russian Federation seems to have allowed the possibility of using a tax on professional income for such a purpose. But by the end of 2021, officials had changed their minds. In 2023, this position was officially confirmed. This is exactly what was reflected in the verdict of the judicial board on economic disputes.
31.10.2024
