We've had cases we lost but are still fighting. But we've also had victories. Here's one example.
In March 2020, the tax authority completed their audit and hit us with CIT, VAT and penalties totaling 84.5 million for 2014-2015. The tax authority made several procedural errors. They prepared the audit report in March but only delivered it in May due to COVID restrictions. Our client made a costly mistake - he signed acknowledging receipt in March when he actually received it in May. The inspector seemed to have tricked him. This meant we missed the deadline to appeal to the Ministry of Finance and had to go straight to court.
We took on the case in July and represented the taxpayer in court. Analyzing the audit report, I found the assessment grounds were questionable - there were valid arguments on both sides. But the most significant issue was that the tax authority had exceeded the 3-year statute of limitations.
At the start of 2020, you may recall there was discussion about a parliamentary bill that would have extended the statute of limitations to 5 years for pre-2020 periods. But that never materialized.
So in 2020, tax authorities could only assess taxes going back to 2017 (assuming no statute extensions). In our case, the bulk of assessments related to 2014-2015. We built our defense around the expired statute of limitations, citing extensive legal precedents, and the court ruled in our favor.
The tax authority appealed, as did the prosecutor's office. As you know, prosecutors always side with tax officials. Why state agencies are so hostile to business is beyond me - but that's a rhetorical question.
Surprisingly, the appellate court didn't rubber-stamp the decision as usual. Instead, they sought confirmation from the Ministry of Economy, which backed our position. The court decision was upheld.
Bottom line: out of 84.5 million tenge in assessments, we got 71 million cancelled. The client also saved 10.6 million in penalties. Total savings: 81.6 million tenge.
