Tax officials are summoned to the director – Finance – Kommersant

The Supreme Court (SC) of the Russian Federation is developing a trend towards softening the too harsh approach to the owners and managers of bankrupt companies. Now the persons controlling the debtor (CDL) have the right to participate in cases on contestation by their organizations of tax claims considered outside of bankruptcy. The Supreme Court acknowledged that the opposite approach violates the principle of equality of arms, because the amount of tax arrears affects the amount of responsibility of the CDL. Lawyers welcome this approach, noting that it will help, first of all, the directors of debtor companies to defend their rights.

The Supreme Court this week published decisions on two disputes over the rights of the CDL. directors Sergey Plaksin and Tatyana Safonova as heads of Triumph LLC and OOO “Industrial Park “Ussuriysky”” were not allowed to participate in the contestation of tax claims against the companies they head. At the same time, in both cases, taxpaying companies are in bankruptcy, the tax authorities are their main creditors, and lawsuits have been filed against ex-heads to bring them to subsidiary liability for the debts of organizations. The only difference is that tax disputes are at different stages of proceedings.

Directors out of business

In the first half of 2019, Triumph appealed against additional tax charges in arbitration courts of three instances, but succeeded in reducing the amount by only 1 million rubles. In October of the same year, the company, on its own initiative, was declared bankrupt, the tax authorities became its largest creditor with 87.8 million rubles. registry requirements. As part of the bankruptcy case, the tax inspectorate filed a lawsuit to bring the former director of LLC Sergey Plaksin to subsidiary liability. Mr. Plaksin tried to appeal the court decisions on the tax dispute, but the courts refused to consider his complaint, considering that he had no right to it.

The initiator of the bankruptcy of the Ussuriysky Industrial Park in 2020 was the tax authorities with demands for 22.44 million rubles, this debt was included in the register of the debtor’s creditors. The bankruptcy trustee filed an application to bring the former director Tatyana Safonova to subsidiary liability. Unlike the first case, here the process of contesting tax claims began only in March 2022, after the company was declared bankrupt. Ms. Safonova filed a petition with the court of first instance to involve her in the case as a third party, indicating that, as a CDL, she could be required to return the tax arrears from her own funds. But the Primorsky Territory Arbitration Court rejected her request, with which the appeal also agreed.

In both the Triumph case and the Ussuriysky case, the courts, denying the directors the right to participate in the proceedings of their companies with the tax authorities, concluded that the interests of taxpayer leaders were not affected here.

Mr. Plaksin and Mrs. Safonova appealed to the Supreme Court, insisting that the decisions of the courts on tax disputes “directly entail material and legal consequences for them.” In this regard, they believe that they have a legal right to participate in tax disputes and appeal court decisions on them. Both cases were referred to the Economic Collegium of the Supreme Court, which overturned the decisions of the lower courts, giving the directors a chance to prove their case.

Equality beyond bankruptcy

The Supreme Court noted that “if the debtor does not have enough funds to cover debts, the negative consequences are often borne by CDLs brought to subsidiary liability.” Even if the bankrupt company has property, all the same, until the completion of settlements with creditors, “the volume of claims included in the register also affects the legal status of the subsidiary debtor”, limiting his property rights, the board added. In this regard, the Supreme Court pointed out, the applicants must be provided with “appropriate judicial remedies”.

The Supreme Court recalled that the Constitutional Court (CC) of the Russian Federation in November 2021 acknowledged the right of the CDL to appeal against the court decision on the inclusion of the creditor’s claims in the bankruptcy register insofar as it relates to the period when the person controlled the debtor. Consequently, the courts are obliged to consider their objections “regarding the validity of the creditors’ claims, including the claims of the tax authorities.”

If the question of the legitimacy of tax claims is resolved outside the framework of a bankruptcy case, then this right should be “granted to a similar extent”: the applicant has the right to participate in a tax dispute as a third party and appeal against the court decision.

The Collegium stressed that if CDL is involved in a subsidy, “the potential amount of their liability will be determined, among other things, by the contested decision of the tax authority,” therefore, decisions on tax disputes “directly affect” their rights. The absence of the CDL’s right to participate in the case of contesting tax claims “may lead to a violation of the principle of equality”, which is unacceptable. As a result, the Supreme Court referred both disputes for a new consideration.

Additional payments during the reign

“Both disputes in the Supreme Court are united by a common problem — the possibility of appealing tax claims by former directors of taxpayers who held their posts during the audited period and were directly related to business transactions that entailed the calculation of taxes,” says Alexander Ovesnov, adviser to the practice of tax disputes at IEF Legal. At the same time, according to him, in recent years, the tax authorities have made much more claims against the CDL – the owners and managers of taxpaying companies.

BGP Litigation’s Dispute Resolution and Bankruptcy Practice Advisor Ruslan Petruchak notes that the widespread use of vicarious liability “revealed the problem of too limited procedural rights for the CDL.”

So, CDLs could only participate in a dispute about attracting them to a subsidy, but not in other disputes within the framework of the bankruptcy case of their organization. Judicial practice proceeded from the fact that CDL “cannot personally enter into tax disputes and try to recoup additional charges”, only the company itself had such a right, and the courts formally approached this issue – they said that “tax charges do not directly affect the director”, says Case by Case lawyer Yulia Mikhalchuk. As a result, it turned out that the head “cannot dispute the additional charges, but is obliged to bear responsibility for them,” she points out.

In 2021, continues Mr. Petruchak, “the situation began to change”: the Supreme Court and the Constitutional Court recognized the CDL’s right to appeal against judicial acts on the validity of creditors’ claims and their inclusion in the debtor’s register, as well as to challenge the actions of arbitration managers that may affect the amount of subsidiary liability. And in November 2022, this was fixed by amending the law – now CDL has the right to participate in various disputes as part of the bankruptcy of an organization controlled by it, which could affect their liability and its size, says Elena, managing partner of the RP-Consulting group of companies Feoktistov. But this did not give the CDL the right to participate in litigation between their organization and the tax authorities outside of the bankruptcy case, she clarifies. This is despite the fact that the ex-directors of taxpayers are “essentially the main persons interested in appealing the decisions of the tax authorities that underlie the bankruptcy of companies,” emphasizes Alexander Ovesnov.

With a sense of sincere subsidiarity

Now, Yulia Mikhalchuk points out, the “pendulum” of tax and subsidiary liability has “seriously swung in the direction of directors’ interests.” The position of the Supreme Court is “long-awaited and positive for business”, because in tax disputes the tax authority often wins, besides, the Federal Tax Service is a participant in almost any bankruptcy case, emphasizes Elena Feoktistova.

It is important to note that in their decisions, the tax authorities “very rarely blame the CDL for negative consequences and violations of the law on the part of the company,” which later was the basis for the courts to deny the same directors the right to participate in the case to challenge the tax decision, Orchards adviser explains Vadim Borodkin. However, “it is obvious that the decision of the tax authority directly affects the amount of potential liability of the taxpayer”, moreover, the tax authorities take “the most active part in disputes about subsidiary liability,” emphasizes Mr. Borodkin. Moreover, if a director is involved in a subsidy, he will have to repay this debt at his own expense, Mr. Ovesnov notes.

The right to participate in a separate process to challenge a tax decision is very important, because if the court recognizes it as legal and justified, then it will no longer be possible to challenge these claims within the framework of a bankruptcy case, explains Ruslan Petruchak.

In this regard, granting the CDL the right to participate in cases challenging decisions to hold a legal entity liable “is of fundamental importance for the real protection of one’s economic interest,” summarizes Vadim Borodkin. “And the more actively they exercise this right, the more likely they will be able to reduce their risks and liability,” adds Ms. Mikhalchuk.

However, heads of taxpayers are still not entitled to independently challenge the decisions of tax authorities or judicial acts on tax disputes. In addition, the director can apply for judicial protection of his rights only in the event of personal claims related to the violation of tax laws — for example, claims for subsidiary liability or for the recovery of damages, clarifies Alexander Ovesnov. The fact that CDLs received the right to appeal court decisions on tax disputes considered earlier without their participation “inspires cautious optimism,” Mr. Ovesnov concludes, but this “still does not guarantee a positive outcome of the dispute for them.”

Anna Zanina, Ekaterina Volkova