Punishment for libel and knowingly false accusation: criminal liability under Article 129 of the Criminal Code of the Russian Federation

Slander and false accusation

The law allows each of the parties to the dispute to protect their honor and reputation from:

Insults – open statement in a personal conversation or in the presence of outsiders of impartial information about a citizen using obscene language.
Slander is the communication to third parties of deliberately false information that denigrates a person’s reputation in the eyes of the listener.
False accusations – providing law enforcement agencies with false information about a citizen’s involvement in a crime.

Criminal liability for libel and false accusation

Insults relate to administrative legislation. According to Article 5.61 of the Code of Administrative Offenses of the Russian Federation, for them a fine of up to 3 thousand rubles can be imposed on the culprit, and if the defendant is an official, then up to 30 thousand rubles. If the abuse was voiced through a public speech or through a media broadcast, the fines will increase to 5 and 50 thousand rubles, respectively.

Libel and false accusations fall under criminal law:

Article 218.1 provides for liability for libel, and the severity of the sanctions depends on the method of dissemination of false information and the mass coverage.
Section 306 sets out the penalty for knowingly attempting to mislead the police as to whether a person was involved in the killing or whether an offense had been committed. Moreover, if the applicant had no intent, he assumed that the crime could have been committed with the participation of the specified person, then liability does not arise.

Qualification of the crime

The main criteria for recognizing disseminated information as slander or false denunciation are:

Intentionality - the source of information dissemination was knowingly aware of its unreliability. If the distributor could not have known in advance about the falsity of the message, this will be considered a delusion.
Disclosed information negatively affects the reputation of a person - if true or false information was disseminated, which does not in any way affect the reputation in the eyes of others, this cannot be considered slander.
Disclosure to third parties during a conversation, during official communications, in public speech or through mass media.

The essence of the disseminated data is also important for qualifying the offense. For example, when it comes to involvement in crimes of a sexual nature or the health status of the slandered person. The position of the slanderer relative to the victim is also taken into account. For example, if the defendant used his position to denigrate the reputation of a colleague.

Don't be angry and don't be silent: how to respond to a false accusation

Imagine that your neighbor accuses you of stealing. You didn't do this. But the neighbor doesn’t believe it and continues to insist. At this time, other neighbors approach and watch the confrontation unfold.

How would you respond to a false accusation? Perhaps they would get angry. But even if this anger is justified, it will increase the likelihood that your neighbors will think you are guilty.

This is the key finding of a new study published in the journal Psychological Science. Paradoxically, anger can cause the accused to be seen as guilty, even though anger is usually a sign of innocence.

Why is that? The study notes that we monitor other people's emotions to understand social situations. And especially when deciding whether to trust someone.

For example, past research suggests that people use reliability to make judgments about whether a person is guilty. Moreover, it has been proven that anger makes people less trustworthy. With these two findings in mind, the researchers hypothesized:

“...when a person sees the suspect’s anger, he finds him unreliable, thereby forming an idea of guilt. He may even interpret the suspect's expressed anger as a deceitful attempt to appear innocent, feigning moral indignation. Observers consider the angry suspect guilty because they sense insincerity.”

If the accusation is false, remain calm... but not silent

Six studies examined how lay people and experts make judgments of guilt when the accused is angry. In one series of studies, participants watched clips of people accused of minor crimes arguing their case in a courtroom on a TV show called "Judge Faith." The results showed that participants were more likely to judge defendants who were angry to be guilty.

In another study, participants read about a fictional man named Andrew Smith who was accused of committing an armed robbery. The study included four versions of Smith's reaction to the accusations during his hypothetical testimony: anger, calm, silence and irritation. In the case of silence, it was said that Smith invoked the Fifth Amendment to the Constitution (“A person accused of a crime has the right to due process of law.” - Ed.). In other cases the description looked like this:

Calm: “I really can’t believe I’m being accused of this crime.”
Irritation: “I’m annoyed that I’m being accused of this crime.”
Anger: “I’m absolutely furious that I’m being accused of this crime!”

Participants made the most decisions about Smith's guilt in cases where he remained silent. In addition, when he was angry, Smith seemed most guilty to participants, and when he was irritated, he seemed more guilty than when he was calm.

In a similar experiment, participants read one of two fictional scenarios involving a man named Nathan. In both cases, he was credibly accused, but not necessarily guilty, of either cheating on his girlfriend or stealing money from his employer. Participants were randomly given texts with either an angry or a calm reaction. The anger state was as follows: “Nathan raises his voice and angrily denies responsibility, exclaiming, “I'm so angry that you think I could have done this!” Calm: "Nathan calmly denies responsibility, stating, 'I really can't believe you think I could do this.' Again, participants were more likely to call the hero guilty when he was angry.

Do ordinary people really think that anger is a sign of guilt? To test this idea, the researchers conducted an experiment similar to the previous one, but the participants were professionals who regularly have to make informed judgments about the guilt of others, such as fraud investigators and auditors.

And they also rated expressions of anger as a sign of guilt. Like silence, which is interesting.

Falsely accused are more evil

When someone reacts angrily to an accusation, other people tend to view that person as guilty. But is anger really a sign of guilt?

To test this, the researchers asked another group of participants to complete one of two tasks, both of which involved text editing. One task was simple, the other difficult. All participants were told that they would be paid for completing the task.

After the participants completed the task, the researchers told them that they had done it incorrectly and therefore would not receive a bonus payment. This was a false accusation for the participants doing the simple task because most of them did it correctly. Meanwhile, the participants who were given the difficult task made mistakes in most cases, so the accusations were mostly justified.

The researchers then asked both groups how angry they were. The results showed that those who were falsely accused experienced significantly greater feelings of anger than those who were justly accused.

Man is a very bad lie detector

Overall, the results show that most people are simply bad at detecting lies. This deficiency likely contributes not only to interpersonal conflicts but also to false criminal charges.

The researchers said their findings add important information to the field of deception detection by showing that anger serves as a sign of innocence rather than guilt.

“This is especially important because most studies of the emotional cues of deception find little connection between other discrete emotions and guilt,” the researchers wrote. “Although research on the psychology of anger suggests that the social information it reflects is that someone else is at fault, we believe that anger in this context falsely conveys the opposite to others: guilt.”

The study concluded: “There are many reasons to feel angry when accused of wrongdoing, but perhaps none is as powerful as the belief that the accusation is false.”

Source

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Liability for libel and knowingly false accusations under the law of the Russian Federation

The Criminal Procedure Code of the Russian Federation classifies libel as an offense of private prosecution. Only the slandered person can initiate prosecution of the slanderer. To protect legitimate interests, he has the right to apply:

to court with a demand to bring the offender to criminal liability or with a claim for moral damages and a demand to refute false data under Articles 151 and 152 of the Civil Code of the Russian Federation, respectively;
to the police with a statement about an offense committed against oneself;
to the prosecutor's office with a complaint about actions that damaged the citizen's reputation.

Note!
Prosecution even under light charges, which include libel, can worsen a citizen’s subsequent opportunities for employment, participation in politics, and other areas. Upon learning that an application has been filed with the court or law enforcement agencies, the defendant should engage a qualified attorney.

3 ways to avoid criminal liability for libel

Libel cases are difficult for both parties, as it is necessary to prove or disprove the presence of intent in disseminating false information. From a defense point of view, the strategy can be built in three directions:

Prove that the information disseminated was true or that the defendant had sufficiently compelling reasons to believe it was so.
Establish the source from which the defendant received false information, which was relayed by him - in this case, the defendant can also refer to his belief in the reliability of the information. Call recordings, correspondence and other data should be provided to law enforcement agencies and the court.
If the slander was formed on the basis of statements taken out of context or edited material in the media, you should attract witnesses to the conversation, find the original recording of the broadcast, speech or meeting, which would confirm the absence of intentions to discredit the plaintiff in the words of the defendant.

Note!
Pre-trial reconciliation with the injured party would be optimal. According to Article 20 of the Code of Criminal Procedure of the Russian Federation, this is possible until the court retires to a special room to make a decision on the case.

Unreasonable benefit: how to defend against accusations?

Many companies greeted Article 54.1 of the Tax Code of the Russian Federation with optimism, but over time it began to raise more and more questions among lawyers, accountants and entrepreneurs. To confirm your integrity, you need to be careful and know the jurisprudence. Vadim Kosyakov spoke in detail about the prospects and risks of litigation over unjustified tax benefits in his article.

Consequences of receiving an unjustified tax benefit

On August 19, 2022, Article 54.1 of the Tax Code of the Russian Federation[1] came into force, establishing the limits for the exercise of rights to calculate the tax base and the amount of taxes, fees, and insurance contributions. In other words, this article established the possibility of obtaining tax benefits only if the taxpayer’s transactions are real. According to the article, the main purpose of the taxpayer’s transaction must be a specific reasonable economic (business) purpose, and not tax savings. If the tax reduction only formally complies with the law, then we are talking about obtaining an unjustified tax benefit, which implies enrichment at the expense of the budget.

Having recognized the tax benefit as unjustified, the Federal Tax Service has the right to withdraw expenses, refuse to deduct VAT, not confirm the benefit, not return or charge additional taxes, and charge penalties and fines[2].

Criteria for the validity of a tax benefit

Now in paragraph 2 of Art. 54.1 of the Tax Code establishes clear criteria for the validity of tax benefits while simultaneously complying with them:

– non-payment/incomplete payment and/or offset/refund of the tax amount was not the main purpose of the transaction;

– the obligation under the transaction is fulfilled by a person who is a party to the agreement and/or by a person to whom the obligation is transferred under the agreement or law.

According to the letter of the Federal Tax Service of Russia dated August 16, 2017 No. SA-4-7/ [email protected] “On the application of the norms of the Federal Law dated July 18, 2017 No. 163-FZ” “... when the tax authorities establish the presence of transactions (operations) concluded by the taxpayer, although would be one of the two circumstances defined in paragraph 2 of Art. 54.1 of the Tax Code of the Russian Federation, he should be denied the right to account for expenses incurred, as well as applications for them to deduct (offset) VAT amounts in full.”

In the absence of the circumstances specified in paragraph 1 of this article, the tax base and (or) the amount of tax are considered unlawfully reduced.

Limits of application of judicial practice and norms of Article 54.1 of the Tax Code of the Russian Federation

Before the adoption of this article, controversial legal relations had no legal interpretation and were explained only by legal positions developed by the highest judicial authorities. As a result, the permitted limits of tax optimization had to be sought in judicial acts summarized from the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53 of October 12, 2006.

Most of the provisions of Article 54.1 of the Tax Code of the Russian Federation, when compared with Resolution of the Supreme Arbitration Court of the Russian Federation No. 53, are not something new. The resolution established similar provisions that prevent the receipt of unjustified tax benefits.

It must be remembered that the rules of Art. 54.1 of the Tax Code of the Russian Federation are subject to application only for inspections appointed after August 19, 2017, when they entered into legal force. And according to the results of audits for 2016–2017, taxpayers have to operate only with the concepts and principles of the old norms established by Resolution of the Supreme Arbitration Court of the Russian Federation No. 53. This argument is also confirmed by judicial practice[3].

At the same time, the Federal Tax Service of Russia in Letter dated October 31, 2017 No. ED-4-9/ [email protected] noted that the concepts reflected in the Resolution of the Plenum No. 53 and developed in the established judicial practice formed before the entry into force of Art. 54.1 of the Tax Code of the Russian Federation, are not used within the framework of:

desk tax audits of tax returns (calculations) of taxpayers submitted to the tax authorities after the entry into force of Art. 54.1 Tax Code of the Russian Federation;
on-site tax audits and audits of the completeness of calculation and payment of taxes in connection with transactions between related parties, decisions on the appointment of which were made after the day Art. 54.1 Tax Code of the Russian Federation.

However, the courts believe that the adoption of Art. 54.1 of the Tax Code of the Russian Federation do not cancel either Resolution No. 53, nor the possibility of applying the legal positions of higher courts, which were developed during its action and continue to mention Resolution No. 53 along with references to Art. 54.1 Tax Code of the Russian Federation[4].

For example, the Arbitration Court of the Kemerovo Region heard a case in which the tax authority expressed the position that the taxpayer’s arguments about the exercise of due diligence and caution when choosing contractors, about the economic justification of the expenses incurred, the absence of a goal of understating corporate income tax, the fact and amount of expenses incurred expenses have no legal significance due to the provisions of Article 54.1 of the Tax Code of the Russian Federation.

The tax authority considered that this article was a legislative novelty and assumed that in the absence of real relations with the declared counterparties, even if the reality of the movement of goods from third parties and the reality of the expenses incurred, the taxpayer does not have the right to take them into account. But in its decision dated September 25, 2019 in case No. A27-17275/2019, the Arbitration Court of the Kemerovo Region indicated that the norms of tax legislation, on the basis of which the highest courts developed legal positions, have not changed, including with the entry into force Art. 54.1 of the Tax Code of the Russian Federation: the appearance of this article in the Code was not accompanied by a change in the principles of legal regulation in the field of taxation, the introduction of additional tax offenses, or a narrowing of the powers of tax authorities.

In another case, also considered in the Arbitration Court of the Kemerovo Region, the court, in its decision dated October 21, 2019 in case No. A27-18448/2019, also sided with the taxpayer and indicated that he showed due diligence when choosing contractors, carried out standard competitive procedures, received the proper documents from them. At the time of entering into economic relations with counterparties, the taxpayer was not aware that the tax authority had identified circumstances in their regard that characterized them as unscrupulous taxpayers.

From the case materials it followed that the company carried out coal enrichment during the period under review. This process goes on around the clock, and waste is generated. Since the taxpayer did not have its own trucks, it hired contractors to remove the said waste to a dump.

In assessing additional income tax to the company, the inspectorate, without disputing the technological necessity of transport services and the fact of incurring expenses, proceeded from the impossibility of accounting for them on the basis of Art. 54.1 of the Tax Code of the Russian Federation, since they were incurred in transactions with disputed counterparties, in the presence of formal document flow. However, during the trial it was established that all business transactions took place. Witnesses confirmed that the contractors had employees and rented vehicles. Interaction on the substance of the provision of services was carried out directly with the management of the counterparties, and there was no evidence that the provision of services was organized by the taxpayer himself in direct interaction with vehicle owners and drivers. The tax authority did not prove the dishonesty of the counterparties. Taking into account the above, the applicant’s income tax expenses were found by the court to be justified; additional assessment of corporate income tax, corresponding penalties and fines are illegal.

In another case No. A14-15705/2018 dated May 17, 2019, considered by the Arbitration Court of the Voronezh Region, the court considered that the taxpayer showed sufficient diligence because before concluding the agreement, he requested from the counterparty a charter, an extract from the Unified State Register of Legal Entities, a certificate of registration, a certificate on assignment of TIN. In addition, the counterparty provided the taxpayer with an advertising brochure indicating the facilities it had previously built. All this, according to the court, confirmed the real nature of the counterparty’s construction activities.

All of the above decisions of the higher courts were upheld.

Thus, from the analysis of judicial acts it is clear that, despite the new norms of Article 54.1 of the Tax Code of the Russian Federation, the courts continue to take the side of the taxpayer in situations controversial with the tax authorities, when it comes to doubt about the reality of business transactions, if the taxpayer showed evidence before concluding the transaction due diligence when choosing a counterparty.

Positions of the courts when resolving controversial situations under the new rules

As stated above, paragraphs. 1 item 2 art. 54.1 of the Tax Code of the Russian Federation establishes a prohibition for a taxpayer to reduce the tax base and (or) the amount of tax payable in the case where the main purpose of the transaction (operation) is non-payment (incomplete payment) and (or) offset (refund) of the tax amount.

According to the tax authority[5], the prohibition on a taxpayer reducing the tax base and (or) the amount of tax payable should be applied in case of proof of deliberate actions of the taxpayer himself, expressed in deliberate distortion of information about the facts of economic life (the totality of such facts), about objects of taxation subject to reflection in tax and (or) accounting or tax reporting of the taxpayer for the purposes of:

reduction by the taxpayer of the tax base and (or) the amount of tax payable;
incorrect application of the tax rate, tax benefit, tax regime;
manipulation of taxpayer status;
intentional actions of a tax agent in non-withholding (incomplete withholding) of tax amounts subject to withholding by the tax agent.

The tax authority also notes that typical examples of “distortion” are:

creation of a “business fragmentation” scheme aimed at the unlawful use of special tax regimes;
taking actions aimed at artificially creating conditions for the use of reduced tax rates, tax benefits, and tax exemptions;
creation of a scheme aimed at the unlawful application of the norms of international agreements on the avoidance of double taxation;
unreality of execution of the transaction (operation) by the parties (lack of fact of its completion).

Methods of distorting information about objects of taxation may include: non-reflection by the taxpayer of income (revenue) from the sale of goods (work, services, property rights), including in connection with the involvement of controlled persons in business activities, as well as reflection by the taxpayer in the accounting registers and tax accounting of obviously unreliable information about taxable objects. In these situations, the tax authority will assess whether the conditions for their application have been artificially created in order to reduce taxes.

Judicial practice on these disputes has just begun to take shape, but even taking this into account, it is possible to analyze the most interesting, in our opinion, court cases and consider the reasons why the court sided with the taxpayer.

Let us consider several court decisions on these disputes.

Application of a business division scheme

Tax evasion under the scheme of artificial business fragmentation consists in maintaining or obtaining the status of a tax payer under a special tax regime by simulating the work of several persons who in reality act as one person.

In the case considered by the Arbitration Court of the Volgograd Region, the tax authority pointed to the interdependence of the companies as signs of applying a business fragmentation scheme and, as a result, obtaining unjustified benefits; being at the same address; use of the same production equipment; availability of part-time employees.

But the court pointed out that the implementation by companies of one type of activity is not a valid argument in favor of the existence of a “business fragmentation scheme”, since it does not contradict the law and this circumstance in itself cannot indicate that the company has received an unjustified tax benefit.

Based on the analysis of the current judicial practice in the category of cases related to business fragmentation, it follows that the legally significant circumstance to be clarified, both as part of the audit and when considering the case in court, is the main purpose of these actions of the taxpayer. This goal should be to reduce the tax burden on the taxpayer by applying a special regime to one of the friendly companies and receiving its main income from business activities.

In this case, the taxpayer was able to provide evidence that both companies actually and independently carried out their activities in accordance with the business purpose and type of economic activity for which they were created: they have separate current accounts, maintain separate accounting records, and make payments based on the results of independent economic activities taxes and fees, have a different client base.

The taxpayer was also helped by the fact that initially one company was created, which was on the simplified tax system from its very inception, while until 2015 it was managed by another person, and 9 years later another company was created using the simplified tax system.

In its decision dated April 29, 2019 in case No. A12-2866/19, which was supported by the appellate instance, the Arbitration Court of the Volgograd Region considered that the tax authority did not establish a beneficiary “according to the business splitting scheme”, no evidence was provided of financing from each other’s companies, as well as evidence that the funds received by these legal entities were pooled by them by transferring them to one of the taxpayers, or that these organizations, having received net profit, used it jointly for certain purposes; the inspection did not provide evidence that the interdependence of the organizations affected the conditions or economic results of the transactions and activities of the participants. At the same time, the fact of affiliation in itself does not indicate receipt of a tax benefit[6].

Unrealistic execution of the transaction (operation) by the parties

Business transactions through counterparties who do not have labor resources and fixed assets to perform work or services, as well as the lack of due diligence when checking the counterparty before concluding a transaction, allows the tax authority to conclude that the transaction is unrealistic.

The Fifth Arbitration Court of Appeal in its ruling[7] took the side of the taxpayer and pointed out that the inspection did not prove the presence of all the conditions under which a tax benefit can be considered unjustified, as explained in paragraphs 1, 10 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 53. The appellate instance noted that when confirming the reality of the delivery of goods, the company showing due diligence in choosing a counterparty and the absence of evidence of dishonest behavior of the taxpayer, there were no legal grounds for recognizing the tax benefit received by the company, which was not justified by the tax authority and the court of first instance.

The court pointed out that all these circumstances were reflected in Article 54.1, newly introduced into the Tax Code of the Russian Federation, which establishes that if a business transaction is real and the taxpayer does not have the goal of non-payment (incomplete payment) and (or) offset (refund) of the tax amount identified by the tax violations of tax legislation by the taxpayer's counterparty cannot be considered as an independent basis for recognizing the taxpayer's reduction of the tax base and (or) the amount of tax payable as unlawful.

Thus, tax claims are possible only if the tax authority proves that the transaction (operation) was not executed by the taxpayer’s counterparty and the taxpayer failed to comply with the conditions established by paragraph 2 of Article 54.1 of the Code.

The taxpayer was helped to prove his right to receive tax benefits by the following facts that he was able to present to the court:

the terms of the agreement for the supply of goods were agreed upon by telephone and e-mail, the conclusion (signing) of the agreement took place in the applicant’s office, at the time of the conclusion of the agreement the applicant was presented with documents such as TIN, OGRN certificates, the charter of the counterparty, the decision to establish, the order to appoint a director, a copy of the director’s passport, a power of attorney in which this person is authorized to represent the interests of the counterparty, with the right to sign any financial documents on behalf of the company;
invoices are signed by an authorized person. At the same time, the absence of information from the inspectorate on a certain date about the new manager does not indicate that the invoice was signed by an unauthorized person;
the reality of the execution of the supply agreement was confirmed by the invoices submitted by the taxpayer during the audit, which is consistent with the terms of the agreement, as well as the actual payment for the goods to the account of the counterparty.

In addition, the taxpayer indicated that the reason for choosing this counterparty was the provision of a deferred payment for the supplied goods, as well as the reasonableness of prices and delivery of goods by the supplier.

The Arbitration Court of the Nizhny Novgorod Region did not support the position of the tax authority, based on similar facts.[8] The inspectorate did not agree with the VAT deduction made for transactions between the taxpayer and two counterparties. These counterparties also did not have sufficient labor resources, one of the organizations was not located at the place of registration and had a nominee manager, the second counterparty was a related person with the taxpayer. The drivers of these organizations denied supplying goods to the taxpayer.

All of the above circumstances, in the opinion of the tax authority, together indicated that there were no real financial and economic relationships between the taxpayer and the counterparties; the documents on the basis of which the taxpayer claimed VAT tax deductions did not comply with the requirements of the law and contained unreliable information.

But the court found that business transactions with counterparties are reflected in the taxpayer’s accounting and tax reporting. Taxes have been paid by the taxpayer.

According to the court, the inspection did not provide evidence that the applicant was aware of the violations committed by his counterparties, nor that the applicant acted in concert with them - solely for the purpose of obtaining unjustified tax benefits. Moreover, the taxpayer showed reasonable care and prudence by requesting and receiving copies of the constituent, registration and administrative documents of its counterparties.

The fact that counterparties do not have personnel, fixed assets, production assets, property, vehicles, storage facilities necessary to achieve the results of the relevant economic activity does not mean that the work was not performed, nor does it mean that the counterparties are “unscrupulous organizations” and transactions with them were carried out only to obtain an unjustified tax benefit.

The court also did not take into account the inspectorate’s argument that the counterparties did not submit documents at the request of the tax authority, since the taxpayer is not responsible for the actions or inactions of its counterparty.

The interrogation protocols of the counterparties' drivers were not taken into account on formal grounds, and the testimony of other witnesses confirmed that the transactions with the counterparties were real. The court also did not accept the inspector’s argument about the affiliation of the taxpayer and the counterparty and the nominee of the head of the other counterparty.

The court took into account the fact that the inspection carried out an audit to determine whether the taxpayer was correctly charged not only value added tax, but also income tax. However, the inspection, having assessed additional value added tax, did not make additional assessments of income tax, thereby agreeing with the supply of goods and the provision of transportation services to the disputed contractors.

At the same time, the court noted that the taxpayer showed reasonable care and prudence. Requested and received a registration certificate, TIN certificate, founder’s decision to create, order to appoint a director, list of participants, extract from the Unified State Register of Legal Entities, client questionnaire, charter, copy of the director’s passport, accounting statements, VAT returns, lease agreement.

Based on the foregoing, the court concluded that the applicant submitted all the necessary documents, properly executed, to obtain tax benefits.

The appellate court upheld this decision.

The Twentieth Arbitration Court of Appeal, in its ruling dated October 23, 2018 No. 20AP-5530/2018 in case No. A23-8752/2017, also sided with the taxpayer. He pointed out that formal claims against counterparties (violation of the legislation on taxes and fees, signing of documents by an unidentified person, etc.) in the absence of facts disproving the reality of transactions and operations carried out by the declared taxpayer by the counterparty are not an independent basis for refusal to account for expenses and in tax deductions for transactions (operations).

The provisions of paragraph 2 of Article 54.1 of the Tax Code of the Russian Federation do not provide for negative consequences for taxpayers for unlawful actions of counterparties of the second, third and subsequent links.

Consequently, tax claims are possible only if the tax authority proves the unreality of the transaction by the taxpayer’s counterparty and the taxpayer’s failure to comply with the conditions established by paragraph 2 of Article 54.1 of the Tax Code of the Russian Federation.

The fact that the counterparty does not own fixed assets does not affect its ability to fulfill contractual obligations. This circumstance does not deprive the specified person of the opportunity to exercise the right to lease (sublease) the necessary funds.

Thus, the courts came to the conclusion that the counterparty’s lack of necessary funds cannot be recognized as a circumstance indicating the unreality of business transactions within the framework of the concluded agreement.

The services provided by the company's counterparty were accepted by the applicant for accounting on the basis of the submitted documents. This fact was not disputed by the tax authority.

As we see, in this case, the taxpayer had indisputable documentary evidence of the reality of the transaction.

The Arbitration Court of the Sverdlovsk Region dated May 13, 2019 in case No. A60-75291/2018 in a similar situation also made a decision in favor of the taxpayer, and higher authorities upheld it. In fact, the tax authority's claims to the taxpayer's deductions were due to the counterparty's lack of property and labor resources.

As it was found out from the documents submitted by the taxpayer, the director (aka participant of the counterparty) was registered in only one organization. The main activity of the counterparty corresponded to the work performed under the contract. There were no records of unreliability regarding the counterparty. One of the convincing grounds for the court was the fact that the taxpayer presented the primary documents for the transaction (invoices, acts of acceptance of work performed (form KS-2, certificates of the cost of work performed, etc.).

Although the counterparty did not provide information about payments to employees, according to the court, this did not mean that there were no employees at all, since he could attract them, but not submit reports in Form 2-NDFL.

Thus, the courts, in both the first and second cases, concluded that the activities of organizations cannot be made dependent on the presence or absence of a sufficient number of employees, technical personnel, property, expenses for utilities, wages, communication services, since Current legislation does not oblige an organization to have its own fixed assets and appropriate staff when carrying out business activities.

To summarize, I would like to note that despite the fact that the established judicial practice regarding the application of the provisions of Art. 54.1 of the Tax Code of the Russian Federation is virtually absent, however, the arguments, motivation and justification regarding the facts of the presence or absence of an unjustified tax benefit, currently formed within the framework of law enforcement practice in the context of Resolution No. 53, will be used by the courts in the context of Art. 54.1 Tax Code of the Russian Federation.

At the same time, the taxpayer’s position in a legal dispute with the tax inspectorate will be more advantageous if he takes all necessary actions to check the counterparty before concluding a transaction, transactions with him will correspond to economic sense and their business purpose will be confirmed.

[1] Introduced by Federal Law No. 163-FZ of July 18, 2017 “On Amendments to Part One of the Tax Code of the Russian Federation”

[2] Art. 122 Tax Code of the Russian Federation; clauses 2 and 11 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 No. 53 “On the assessment by arbitration courts of the validity of the taxpayer’s receipt of a tax benefit”

[3] Resolution of the Arbitration Court of the Moscow District dated November 8, 2019 No. F05-18947/2019 in case No. A40-315815/2018; Resolution of the Tenth Arbitration Court of Appeal dated November 29, 2019 No. 10AP-17521/2019 in case No. A41-40264/2019

[4] Resolution of the Arbitration Court of the West Siberian District dated July 22, 2019 No. F04-2979/2019 in case No. A27-24569/2018

[5] Letter of the Federal Tax Service of Russia dated October 31, 2017 No. ED-4-9/22123@

[6] Determination of the Constitutional Court of the Russian Federation dated 04.06.2007 No. 320-O-P

[7] Resolution of the Fifth Arbitration Court of Appeal dated May 18, 2018 No. 05AP-1916/2018 in case No. A51-30566/2017

[8] Decision of the Arbitration Court of the Nizhny Novgorod Region dated December 24, 2018 in case No. A43-27187/2018

Punishments and fines for spreading false information and accusations

Since Article 306 of the Criminal Code of the Russian Federation is associated with the unreasonable diversion of police resources, the punishment under it is more severe. The applicant faces:

up to 2 years in prison or a fine of up to 120 thousand rubles for false denunciation without aggravating factors;
up to 3 years or a penalty of up to 300 thousand rubles, if the false accusation concerned serious crimes;
up to 6 years in prison if the attacker tried to forge evidence of a person’s involvement in a crime or the fact of committing a crime.

Under Article 218.1, the offender faces sanctions only in the form of fines and long-term compulsory labor. The victim has the right to recover moral damages from the culprit.

Simple dissemination of specified information without qualifying features

Under Part 1 of Article 218.1, a slanderer may be sentenced to a monetary penalty in the amount of up to half a million rubles or within the limits of his average earnings for six months, or to compulsory work for a period of up to 160 hours - 20 working days.

Defamation in public speech, publicly displayed work or media

Using public platforms to disseminate false information increases the maximum monetary penalty to 1 million rubles, and the period of compulsory work to 240 hours.

Deliberately false information about a dangerous illness of a person or his involvement in a crime of a sexual nature has been spread

The sanctions of paragraph 4 of Article 218.1 provide for a fine of up to 3 million rubles, or compulsory work lasting up to 400 hours.