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Comments of Roman Polukhin, lawyer, on «Militia will Come to Get Cash» article

22 October 2010

In shops, cafes and other trading companies or service rendering enterprises control procurement activities can be started to be performed again. Agreement on cooperation in control of taxes and cash registers was signed by the Ministry of Internal Affairs of the Russian Federation and the Federal Taxation Service. However, experts think that hopes of officers of the fiscal authority on field investigators do not have legal grounds.

Since June 2010 militia officers may not independently detect violations of regulations on the use of cash registers: relevant amendments to the law were made within the framework of conducted campaign against “nightmarizng” the business. The taxation officers cannot perform control procurement activities themselves either.

Anyway, according to a document signed by Rashid Nurgaliev, minister, and Mikhail Mishustin, head of the taxation authority, militia officers and “tax collectors” will perform joint activities to detect and suppress violations of laws on taxes and duties and will also control use of cash registers, observance of laws on currency control, bankruptcy, etc.

Receipt “Nightmare”

The concluded agreement can revive control procurement activities – inspections during which inspectors under the guise of common visitors effect a purchase and record that the receipt was not printed. Arbitration courts do not recognize acts executed in the course of such campaigns organized by taxation officers already for several years. “Officers of taxation authorities are not granted the right to perform inspections or to take other control measure by misinforming the person under inspection of their true goals and disguising their status,” Alexandr Sargin, judge of the Arbitration Court of Saint Petersburg and Leningrad Oblast, is convinced. “Check (control) purchase is a simulated purchase and sales transaction. The law does not make provisions for such purchases. Use of evidence obtained in violation of law is not acceptable either.”

Two years ago similar position was supported by the Supreme Arbitration Court of Russia. But the main argument against control purchases effected by taxation services was as follows: this action refers to investigative work which only bodies specifically mentioned in the relevant law shall be entitled to execute. Taxation officers are not included in this list, but bodies of internal affairs are specified in it.

The agreement between the Ministry of Internal Affairs of the Russian Federation and the Federal Taxation Service has already come into force. Thus, entrepreneurs should beware of joint inspections of tax inspectorates “under the lee” of militia. According to the head of press service of the Economic Security Department of the Ministry of Internal Affairs of Russia, inspection of cash registers falls within the competence of the Federal Taxation Service. Bodies of internal affairs were released from audit functions. Militia is engaged only upon request of taxation officers provided there are material elements of the crime. At the same time non-disclosure of taxes can be regarded as the same when an entrepreneur or a company does not print receipts.

However, experts are skeptical about possible involvement of militia officers to check use of cash registers: “The goal of investigative work is to detect, to prevent, to suppress and to solve crimes, but not administrative offences to which failure to use cash registers refers,” Alexey Kulikov, managing partner of the Agency of Tax Attorneys, explains. “No doubt, it is possible to open “an operational case” for each inspection. Saying that there was information about the crime; we effected a control purchase; facts were not proved true, but a violation was detected “by chance”. But if there are a lot of such “chances”, the prosecutor’s office hopefully will pay attention to it,” he notes.

Roman Polukhin from Vertical legal consulting office agrees with him: “Control purchases are not specified among control measures which taxation bodies are entitled to take. They are not mentioned in the law on cash registers either. Thus, inspectors shall involve officers of bodies of internal affairs that have such rights into the inspection. Furthermore, failure to give a cash register receipt is not included in a list of violations on which representatives of taxation authorities can make reports. Only militia officers are entitled to do it. Therefore, a report executed by an official of tax inspectorate has no evidential effect.”

Law and Disorder

According to experts, an act executed following the results of control purchase effected by militia officers and tax inspectors may be easily contested at court. After all, officers of the bodies of internal affairs are not authorized to bring such administrative cases, and “tax collectors”, to execute investigative work. According to the Constitution of the Russian Federation evidence obtained in violation of the law has no force. Herewith, to appeal the ruling on a fine imposed under administrative law, even no state duty needs to be paid.

Roman Polukhin suggests that entrepreneurs should require staff passes and an order for performance of inspection from “inspectors” and copy them. “It is necessary to check whether the order contains all details – a signature of the chief executive, a seal and a list of inspection officers. A militia officer that is not specified in the order may not perform the inspection. The following entry should be made in the report to be signed: “Services of the lawyer are required; I do not agree with the report; I will supply explanations in the presence of the lawyer.” It is desirable for an entity to set up a register of control activities in which the inspection officers shall make a relevant entry,” the lawyer recommends.

According to arbitration statistics, courts invalidate up to 67% of appealed resolutions of taxation officers for bringing to administrative responsibility (including in case of failure to use cash registers). However, negligible share of reports executed in this way comes to the arbitration. According to one of entrepreneurs, inspection officers of different instances visit his shop up to two times a month and do not leave “empty-handed”: “If we properly print the receipt, they will impose a fine for allegedly incorrect time specified in it, worn seal on the cash register, etc. It is possible to find an error in appearance of price labels, etc., and it also entails a fine in the amount of 30-40 thousand rubles. Employees of the sanitary and epidemiological station can find fault with improperly hung window blinds which violate insolation standards set in a SanPiN, and therefore break job safety rules. There is a threat of disqualification for such faults. On the whole, it is easier to admit the fact of failure to use cash register, to pay the fine and in future not to spend money on purchase of the cash register, its maintenance, etc,” owner of pavilion states.

As the practice shows, officers of fiscal authorities have experience not so much in detection of actual violations as in provoking them. For example, officers of Interdistrict Inspectorate No. 11 of the Federal Taxation Service for Saint Petersburg (Tsentralny District) attempted to impose a fine on a neighboring cafe for the fact that its cashier put the printed receipt for a glass of vodka bought by taxation officers on the bar counter together with the change, though, in the opinion of inspection officers, she should have “handed it over to the buyer” (that is she should have made them take the receipt). The arbitration court declared this provocation and a ruling on detected violation of law adopted following its results to be illegal.

Pavel Netupsky

Daily Journal


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