DS Law successfully represents its Client in major non-recognition of losses case

Issue of
the project: Tax dispute on non-recognition of losses in the amount of the loan
and the outstanding result of the bankruptcy of the affiliate borrower

Period: 09.2013
– 12.2013

Value:
938400000 Rubles ($26,800,000+) – Total expenditures, which account for tax
purposes were the subject of the dispute

220 million
Rubles ($6,285,000+) – The amount of arrears and interest accrued on the
results of a field tax audit.

Client: OJSC
“RTK-Leasing”

The project:
The Client company issued a loan structure, which later became affiliated with
the company. As a result of delays in repayment of the loan and accrued
interest, the borrower was adjudged bankrupt and the valued assets were sold to
a third party. Since the amount received as a result of the sale at auction of
the assets at a price determined by an independent appraiser was significantly
less than the loan amount, the company was at a loss. The founders of the
lender after the loan disbursement took part in the management of the borrower,
as well as in the management of the assets and their subsequent purchaser.
Because of these circumstances, the tax authorities, on the results of a field
tax audit, concluded that the actions of the Client (the lender), the borrower,
the bank, the buyer of the asset, as well as third parties were regarded as a
concerted effort to obtain an unjustified tax benefit and, as a result, the
Clients were denied recognition of the loss of the amount of the outstanding
loan.

DS Law
lawyers are in the course of preparing objections to a tax audit. Due to the
reasons given by DS Law attorneys in the objections, the situation with tax
claims has been resolved.