On 17.10.2012 the Federal Tax Service of Russian Federation (hereinafter the «FTS») responding to the taxpayers’ query issued a Letter №АС-4-2/17710 (hereinafter the “Letter”) with clarifications concerning the issues of providing information to taxpayers for the purpose of manifesting the taxpayer’s diligence.
The notion «taxpayer’s diligence» came into practice after the Decision of Plenary Assembly of The Supreme Arbitrazh Court of the Russian Federation of 12.10.2006 № 53, although no definition of the said notion is given neither in the specified Decision, nor in the Tax Code of Russian Federation (hereinafter the «Code»). According to the existing practice, taxpayer’s diligence is understood to be a manner of taxpayer’s actions meaning that the taxpayer uses all legal ways to obtain information about his contractor in order to avoid concluding a contract with a violator. The construction of taxpayer’s diligence is widely used by FTS when it claims unreasonable tax offset appeared in course of taxpayer’s commercial activity or when certain expenses are included into outlay when the income tax is calculated. More…