The Constitutional Court ruled unconstitutionality of a number of provisions of the tax code

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The Constitutional Court issued Decision No. 22-P of May 31, 2018, which recognized the unconstitutionality of a number of provisions of Art. 217 of the Tax Code. With a complaint to the Constitutional Court, a contract serviceman applied to whom, at his request, monetary compensation was paid for the extra days of rest he had laid. In the future, the personal income tax was withheld and transferred to the income of the federal budget from this payment.

Subsequently, the Single Settlement Center of the RF Ministry of Defense, based on the clarification of the Ministry of Finance, according to which, before making the necessary changes to the legislation on taxes and fees, the uncertainty of the provisions of Art. 217 of the Tax Code can not serve as a basis for taxing individuals' income on the specified monetary compensation, and paid the serviceman a refund of half of the previously withheld amounts. In connection with incomplete payment, the serviceman applied to the court

Novocherkassk garrison military court, having come to the conclusion that the provisions of Clauses 1 and 3 of Art. 217 of the Tax Code contradict the Constitution insofar as in the system of current legal regulation they by virtue of their uncertainty allow the imposition of a tax on the income of individuals monetary compensation to servicemen paid at their request instead of providing them with additional days of rest for activities that are held if necessary without restrictions on the total duration of weekly work time, suspended the proceedings and appealed to the COP.

In the decision, the Constitutional Court referred to its Resolution of April 13, 2016 No. 11-P, which verified the constitutionality of the provisions of Art. 217 of the Tax Code of the Russian Federation with respect to the exemption from taxation on personal income of a monthly cash payment established by law for veterans of military operations. According to this decision, in determining the types of income to be exempt from taxation, the federal legislator, using such concepts as "state benefits", "payments", "compensation", "compensation payments", did not specify, however, their content and industry affiliation and did not take into account the fact that the current legislation along with the term "state benefits" uses the term "benefits", and the terms "payments", "compensation", "compensation payments" are found in the legal norms of different sectoral affiliation in a different meaning. Moreover, the Court pointed out that the current legislation does not contain a systemic classification of payments and compensations assigned to persons recognized by the state as needing health status, age, special status and other circumstances in increased social protection, while the majority of such payments and compensations provided by the state citizens at the expense of budgetary allocations, by nature refers to measures of social support.

He referred to the Constitutional Court and to the Order of the Ministry of Defense of the Russian Federation of February 14, 2010, No. 80, which determines the conditions for payment to military servicemen who are on military service on contract, instead of providing additional days of rest. In accordance with it, such payment is made at the expense of and within budgetary funds allocated for the monetary allowance of military personnel. Calculation of the amount of cash compensation is made by dividing the amount of salary according to the military rank and salary according to the military rank established by the serviceman on the day of issuing orders for payment of the specified compensation, by 30 and multiplying by the number of compensated additional days of rest.

The court pointed out that, thus, the monetary compensation paid instead of providing additional days of rest is related to the passage of the service outside the established official time, which may be indicative of its attribution to the taxable income of individuals, payments, and as such is largely similar to the regulated labor legislation compensation of overtime work by a payment in the raised size.

However, this compensation, in the opinion of the Constitutional Court, although it is paid within the budget allocated to the payroll of military personnel, and simultaneously with its payment, is not directly included in the payroll structure, that is, it is not explicitly integrated into the composition of labor remuneration , in respect of which the need for taxation is beyond doubt.

Thus, the Constitutional Court recognized the provisions of paragraphs 1 and 3 of Art. 217 of the Tax Code are not in compliance with the Constitution and indicated the need to amend it. At the same time, the Constitutional Court pointed out: since the provisions of this article were twice recognized in a relatively short time to be inconsistent with the Constitution because of the uncertainty of the regulatory regulation they envisage, he believes that such changes, not limited to the formal subject matter in the present case, should be systemic.








16 July 2018
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