On 26 February 2015, the Russian Constitutional Court will hear the complaint of OAO Gazprom Neft. The text of the complaint is not in the public domain; however, from previous court decisions and the comments of company representatives, it appears that the subject of the hearing will be the understanding of the normative legal act following from Article 2 of the federal constitutional law On the Supreme Court of the Russian Federation, based on current legal interpretation.
According to the oil and gas company, the letter of the Russian Federal Tax Service (FTS) from 21 August 2013, No. AC-4-3/15165, About the mining severance tax, requires the taxpayer to recalculate the tax obligation on the mining severance tax for completed prior tax periods. In the Supreme Arbitrazh Court, representatives of the oil company noted that the document was a binding normative legal act. However, the Supreme Arbitrazh Court expressed a different opinion. In its decision from 10 April 2014, No. VAS-898/14, the court pointed out that the letter does not meet the criteria of a normative legal act but represents only a “clarification of law in connection with the application of the tax authorities.”
Disagreeing with the Court’s opinion, OAO Gazprom Neft applied to the Constitutional Court. Representatives of the oil company recognize that, from a formal point of view, the letter of the Russian FTS cannot be regarded as the normative legal act, yet all tax authorities rely on the explanations of the Russian FTS. Furthermore, the company noted that there was no concept of a normative legal act in practice, and the notion of it, to which the Supreme Arbitrazh Court referred, is based only on formalities that exclude the possibility of challenging the decisions of the authorities.
The legal community hopes that the Constitutional Court finally will end the dispute on the legal status of letters from the tax authority that will help avoid future disputes. It should be clear that the letters of the Russian FTS are not normative legal acts, but their influence is similar. Moreover, as the representatives of OAO Gazprom Neft correctly noted, the lower tax authorities strictly follow the letters of the superior tax authority, which has an impact on the rights of a wide range of taxpayers.
The disputed status of letters from the Russian FTS often favors unfair officials, who, during a dispute, always can refer to the fact that a document is not binding, thereby removing questions as to why they did not follow the recommendations of the tax authority. In this sense, Gazprom Neft is trying to exclude the possibility of a disadvantageous interpretation of tax legislation and regulations with respect to calculating and possibly recalculating the severance mining tax.