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In practice, if as a result of an audit, tax inspectors charged excessive taxes and it was confirmed by the FTS or a court ruling, the company has a right to request reimbursement of the overcharge with interest (according to Article 79 paragraph 3 of the Tax Code). To avoid payment, tax inspectors often try to prove that they did not file a claim and that the taxpayer paid the extra tax voluntarily. This article will explain how to reclaim overcharged tax with interest.

Interest money is reimbursement of the company’s loss due to overcharged taxes. Therefore, the company has a right to reclaim the interest even if it requested to re-direct the overpaid amount to satisfy a different tax debt (Article 79 paragraph 9 of the TC). Thus, the interest is owed to the company regardless of how the tax amount was returned – whether to the bank account or by offsetting another tax. A similar opinion is reflected in the Letter of the FTS # СА-4-7/15431 from September 21, 2011. This is also confirmed by a court ruling (resolution of the Federal Arbitration Court of the Moscow Region # КА-А40/3771-11-П from May 5, 2011).

To reclaim tax overpayments, the company must file an application with the tax inspection. The tax inspection is obligated to rebate the overpaid amount with interest within one month from the date of application.

Interest is calculated from the date following the day the tax overpayment was made through the date of reimbursement (whether to the bank account or by offsetting another tax, according to Article 79 paragraphs 5, 9 of the TC) with interest rate equal to refinancing rate in this period.

Overpaid Tax vs. Excessively Collected Tax – What Is The Difference?

As it is easy to imagine, the tax authorities rarely rebate interest voluntarily. Moreover, they often claim that they are not obligated to do so because the company overpaid of their own good will, without a request for payment.

For example, following the results of the tax audit, authorities assessed an additional tax amount. The company paid the amount without waiting for the formal request for payment, but at the same time applied to the FTS (or later filed a lawsuit) to appeal this decision. If the additional tax assessed is declared unjustified, the tax authorities will view it as overpaid tax without rebating the interest. They recognize as excessively collected tax only in the amount paid in response to a formal request for payment.

Courts in these cases uphold the taxpayer’s side (Resolution of the Federal Arbitration Court of the Moscow Region # А40-8971/11-140-36 from September 16, 2011). However, to avoid filing a lawsuit, it is better to pay additional assessed taxes only after receiving a request for payment.

Review of the arbitration practice of reclaimed and reimbursed taxes of the North-West region shows that in the past six months courts heard 50 cases, 35 of which were won by the companies as taxpayers and the rest – by the tax authorities.

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