The arbitration court supported the side of the tax inspectorate, which accused the structure of the Zenden Group LLC Dom Odezhdy of "deliberately splitting the business" through individual entrepreneurs in order to reduce taxes, Kommersant writes.
Tax dispute between Dom Odezhdy LLC and the Federal Tax Service for 867 million rubles, including 405 million rubles. VAT and 187 million rubles. income tax has been going on for about three years. LLC purchased shoes abroad, after which it sold them to Russian individual entrepreneurs and retail companies. Based on the results of the tax audit for 2013–2015, Inspectorate No. 13 for the Vladimir Region concluded that 22 individual entrepreneurs were controlled by the company and part of the proceeds were withdrawn to them, reducing income tax and VAT. In 2019, House of Clothing challenged the decision of the tax authorities and won in two instances. But in October 2021, the district cassation sent the dispute for a new consideration, in which the tax authorities already won.
The Zenden Group operates three chains of shoe stores under the Zenden, Thomas Munz and Mascotte brands. According to the group, the total retail has about 400 stores in 120 cities. In 2021, the revenue of Dom Odezhdy LLC increased by 23%, to 14,48 billion rubles, net profit amounted to 294,41 million rubles. against a loss a year earlier.
The decision of the arbitration court of the Vladimir region, published on July 30, states that the company "as a result of the artificial division of the business received an unreasonable tax benefit." So, 22 individual entrepreneurs appearing in the case used preferential taxation (a single tax on imputed income and a simplified system), and due to the transfer of part of the proceeds to individual entrepreneurs, the tax burden of the Clothes House decreased by 43,6%, the court considered. The court considered evidence of the scheme that the employees of the Clothing House had access to programs with information about these individual entrepreneurs, and for 12 of them the company was the only supplier. All individual entrepreneurs traded goods received from LLC in Zenden branded stores and accepted network discount cards. There were cases of labor migration of employees between the company and individual entrepreneurs, and the LLC also sold goods to them cheaper than to other retail buyers. Thus, the court concluded, the Clothing House and the entrepreneurs “functioned as a single economic entity.”
Lawyers believe that this decision of the court can be appealed. One fragmentation scheme is not enough to prove it, - believes Sergey Savseris, partner of Pepeliaev Group. He points out that during consideration, the court lowered the standard of proof to an “unacceptably low level”, evaluating only one of the 12 arguments of the Federal Tax Service - about reducing the tax burden of LLCs as a result of applying the chosen business model. In this regard, the company has a chance to cancel the decision in higher instances, if they examine all the arguments of the tax authorities. According to another expert, Alexander Erasov, a partner in the tax practice of the IEF, the company has little chance of winning, "given the current trends in tax disputes being considered by the courts."