Land in question – Economics – Kommersant

The Supreme Court of the Russian Federation (SC) has been referred to the issue of land tax, which is levied on a company’s plot intended for individual housing construction (IZHS), but actually used differently. The use of land for individual housing construction allows a reduced tax rate to be applied. Amendments in 2020 excluded the exemption for the commercial use of the site. However, the lawyers specify, it is not clear from the law what exactly is considered commercial land use and how to prove it. Now it is up to the Economic Board of the Armed Forces to decide.

In March, the Supreme Court will consider a dispute on the calculation of land tax for enterprises. The Tax Code of the Russian Federation (TC) provides for two types of rates for it, setting their limit values ​​- 0.3% and 1.5% of the cadastral value. Since this is a local tax, municipal authorities have the right to reduce the rates, but most often leave the maximum level of the threshold.

A reduced tax rate (0.3%) is provided for certain categories of land. Among them are land plots occupied by the housing stock and engineering infrastructure facilities of the housing and communal complex, as well as provided for individual housing construction. Previously, all land intended for individual housing construction was taxed at a rate of 0.3%, but from January 1, 2020, amendments to the Tax Code excluded a reduced rate for land under individual housing construction “used in business activities.” This caused controversy.

LLC “Tishina” owned five plots with the type of permitted use “for individual housing construction.” For 2020, LLC paid land tax for them at a rate of 0.3% (3.36 million rubles). In November 2021, following an audit, the Moscow Region Tax Inspectorate recalculated the amount of tax at a rate of 1.5% (16.78 million rubles), since the company “is a legal entity conducting commercial activities.” As a result, the company was required to pay an additional 11.61 million rubles. tax and 1.51 million rubles. penalties.

An appeal against the decision to a higher tax authority did not bring success, and the LLC went to court. The Arbitration Court of the Moscow Region in April 2022 refused the company, agreeing only to reduce the penalties by 83.97 thousand rubles. The appeal upheld this decision.

The courts proceeded from the fact that the plots were acquired by the company “for further resale, were not used for their intended purpose and were not intended for personal needs, which does not meet the conditions for applying a reduced tax rate.”

Meanwhile, the court of cassation fully satisfied the LLC’s claim, noting that the inspection did not prove “the company’s use of disputed land plots in business activities.”

The tax authorities appealed to the Supreme Court, stating that the district cassation had drawn the wrong conclusion. According to the inspection, in order to apply a reduced tax rate, it is necessary that the land is not only assigned to a certain category, but also used for its intended purpose. If the land for individual housing construction is used for commercial purposes, then there is no reason to apply the 0.3% rate, the complaint says. At the same time, as part of the audit, the tax authorities found out that in October 2020 the company divided one of the large plots into 291 smaller ones and sold 23 of them to individuals. The case was transferred to the Economic Board of the Armed Forces, the hearing is scheduled for March 22.

According to Sergei Savseris, senior partner at the Pepeliaev Group law firm, for several years now the tax authorities have been “trying to challenge the application of a reduced tax rate by commercial organizations in such cases.” Mr. Savseris clarifies that last year the Supreme Court resolved two such disputes in favor of taxpayers, but they concerned the calculation of land tax for 2019, that is, before the amendments.

Thus, Alexey Artyukh, a partner at Taxology law firm, emphasizes that the case of Tishina LLC is the first dispute over land tax under the new rules, which will be considered by the Economic Board of the Armed Forces, so its decision will be important for practice.

The problem is, Tatyana Makarenko, a lawyer at the Gurichev, Malinin and Partners law firm, notes that the Tax Code does not have an exhaustive list of documents (information) that could confirm the use of a land plot for business or personal purposes, therefore, in each case, this issue is resolved courts.

She believes that the commercial nature of land use may be evidenced, for example, by the sale of real estate as the main activity of the company that owns the site.

Aleksey Artyukh points out that there are no restrictions on the circle of owners of lands for individual housing construction, in contrast to lands for personal subsidiary plots and gardening. Thus, commercial organizations can qualify for a benefit if they do not conduct “systematic business activities with plots aimed at making a profit,” he said. But it is not clear whether a reduced rate can be applied in the event of a one-time or forced sale of the site, Mr. Artyukh points out. Lawyers hope that the Supreme Court will answer these questions.

Anna Zanina, Ekaterina Volkova