Documents are not considered submitted if illegible. Analytical ledgers used for tax purposes must be submitted if requested

27 December 2023
Law Messenger
Ruling of the Arbitration Court of the North-Western District of 19.10.2023 on Case No. A56−91 130/2022

Tax disputes frequently arise over penalties imposed for a company’s failure to submit documents in the course of tax audits.

A company being audited was asked to provide a large quantity of documents, including analytical accounting ledgers which had been approved by the company’s accounting policies for use as tax ledgers. Although the time limit for providing the documents was extended at the company’s request, some documents were not submitted, while others were supplied in the form of illegible copies. The company was penalised under Article 126(1) of the Tax Code.

The company took the view that all the documents had been submitted and further argued that it was not under an obligation to send accounting ledgers since the latter do not constitute documents proving the correct calculation and timely payment of taxes.

The position of the courts

The courts of all three instances supported the inspectorate, pointing out the following factors:

  • It is impossible to identify the documents submitted since they were poorly scanned ("the image is blurred"). The fact that the inspectorate received a cover letter does not constitute proof that the documents were submitted;
  • Since the company’s accounting policies provide for its accounting ledgers to be used for tax accounting purposes, the company is obliged to submit them;
  • There are no exonerating or mitigating circumstances: the inspectorate notified the company in writing that the documents could not be considered as having been properly submitted. The company failed to respond to that notification.

Since the imputed offence consists in the failure to submit documents, it follows that providing poor-quality copies of documents is tantamount to not submitting those documents. The financial accounting ledgers in question are effectively equated with tax ledgers, which must be submitted.
Points to bear in mind

Companies should take a careful and thorough approach to submitting documents requested by the tax authorities. Treating this process in a superficial manner may hinder the conduct of tax control and result in negative consequences, up to and including the imposition of penalties.

The quality of an electronic image of a document is a highly subjective attribute which should be evaluated from all angles. It pays for the taxpayer to engage in constructive dialogue, especially if it has been informed that something is wrong with its documents.

If a company’s accounting policies approve the use of financial accounting ledgers for tax accounting purposes, those ledgers must definitely be submitted since they contain information which is required for audit purposes (it is not correct to view such documents as non-obligatory). Furthermore, self-contradiction on the part of a taxpayer often serves to detract from its overall position.

In cases where an inspectorate extends the time limit for submitting documents and states that it is unable to examine their contents, it is advisable to act consistently and in good faith. Theoretically, the Company could have recreated the documents (if it did not have them to hand) and/or could have notified the inspectorate that it was unable to submit them within the specified time.

Our tax policy and controversy professionals have many years of experience in organising effective dialogue with tax inspectorates, helping to reduce potential risks and minimise questions from the tax authorities. To contact us, please email

  • Irina Luzhina
    Senior Manager
    Tax Controversy Services
  • Igor Iampolskii
    Assistant Manager
    Tax Controversy Services
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