Features of tax relations in the field of taxation of cross-border transactions

Sorokin Alekseн Aleksandrovich Postgraduate student, Department of Financial Law, Moscow State Law University named after O. E. Kutafin (MSLA) 123001, Russia, Moskva, g. Moscow, ul. Sadovo-Kudrinskaya, 9, kab. 444 alexey4.sorokin@gmail.com

With Russia's transition to a market economy and the intensification of globalization processes, the cross-border activity of organizations and individuals in the world market is increasing. As a result, the amount of cash flow, material values between states increases, which affects the taxation of relevant transactions.

Taxation of cross-border transactions is an important point of Russia's tax policy. On the one hand, the tax legislation of Russia should contribute to the global competitiveness of the Russian economy, and on the other hand, it should "protect" the base of tax revenues to the relevant budgets. These two goals sometimes contradict each other, which can lead to a situation of excessive complication of the procedure for taxation of cross-border transactions.

That is why it is necessary to understand the specifics of taxation of cross-border transactions, since both the amount of tax revenues and the attractiveness of the Russian economy for foreign investment depend on it.

It is worth noting that in the scientific literature the question of the specifics of tax relations in the field of taxation of cross-border transactions has not been considered.

In our opinion, it is necessary to consider each element of tax relations in the field of cross-border transactions separately, and based on the analysis we will try to highlight their features.

As is known, in the legal doctrine ^{[1, 2]}, the following elements are distinguished as part of legal relations:

• Subject;
• An object;
• Content.

In the legal doctrine, this structure is well-established. As S. S. Alekseev correctly noted, the structure (elements) of a legal relationship depends on what is meant by a legal relationship ^[3].

For the purposes of the study, we will proceed from the position that tax relations are a type of financial relationship regulated by the norms of tax law ^[4]

In terms of positions on the composition of tax relations in the scientific literature, there are two approaches.

The narrow approach followed by S. D. Tsypkin, D. V. Vinnitsky, N. I. Khimicheva, etc., defines the composition of tax legal relations as a relationship for the establishment, introduction and collection of taxes and fees. Thus, D. V. Vinnitsky notes that the core of tax relations are organizational, property and organizational relations for the establishment, introduction and collection of taxes and fees ^[5].

In the legal tax doctrine, a broader approach is also known (E. Y. Gracheva, I. I. Kucherov), according to which, in addition to the above-mentioned relations, tax control, appeals against acts of tax authorities, actions (omissions) of officials, the procedure for bringing to responsibility for committing tax offenses are included in tax relations. As I. I. Kucherov correctly notes, the relations on the establishment, introduction and collection of taxes (fees) in this case act as the main ones, and other relations are derived from them ^[6]

Tax legal relations as a special type of legal relations have the same structure ^[7]. It is worth noting that the tax relations themselves have certain features that are expressed in a special subject and object of legal relations ^[8].

Let's consider each element of relations in the field of taxation of cross-border transactions separately.

The subjects of tax legal relations in the field of taxation of cross-border transactions, in addition to the competent authorities (tax, customs authorities), are persons who have the obligation to calculate and pay taxes to the corresponding budget of the budgetary system of Russia. These persons can be both taxpayers and tax agents.

At the same time, a foreign person will necessarily be one of the participants in legal relations, since cross-border transactions are the object of legal relations.

It is worth noting that in the scientific tax literature and law enforcement practice, the phrase "cross-border transactions" is actively mentioned and used (Letter of the Federal Tax Service of Russia dated 06.05.2019 No. CA-4-7/8448@ "Review of judicial disputes on the application of the provisions of international tax treaties and abuse of legislation in cross-border transactions"), but both in legislation and this definition is not disclosed to the doctrine.

Before defining a "cross-border operation", it is necessary to define what is meant by an operation.

The Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation) does not contain the concept of "operation". At the same time, this category is used in certain provisions of the Tax Code of the Russian Federation, for example, Article 149 of the Tax Code lists transactions that are not subject to taxation (exempt from taxation) with value added tax. 

There is no consensus in the scientific literature and doctrine on what is meant by surgery.

So, in the dictionary of economics and law, an operation, among other things, is understood as a set of interrelated actions to solve a single economic task or problem, an entrepreneurial transaction ^[9]. In the Collins English dictionary, a transaction is an action that changes the financial position of a company, for example, the act of buying or selling something ^[10].

As follows from the definitions above, an operation is understood to be an action, that is, the purposeful activity of a person, but it is not specified what exactly the consequences of operations lead to.

As correctly noted in the Wex Definitions Team dictionary of terms, a transaction is an event related to a business relationship carried out between two or more parties that involve the formation and fulfillment of an obligation or transaction ^[11].

It is worth agreeing with the above definition that transactions are not limited to transactions only, but are generally aimed at the emergence of obligations between the parties.

It should be noted that the term "operation" is repeatedly mentioned in the legal literature. For example, in the field of currency law, the definition of "currency transactions" is used, which refers to legal actions of residents and non-residents aimed at establishing, changing or terminating their rights and obligations with respect to valuables ^[12].

In the field of financial and economic doctrine, the definition of "economic operation" is used, For example, Plotnikov V. S. by economic operation means a fact, a phenomenon that causes changes in the economic process, and therefore in the economic activity of the organization, in its financial situation ^[13]. An interesting definition of a business transaction is given in the Encyclopedia of Law: business transaction - in accounting, any legally and economically significant action of a business entity (commercial organizations and non-profit organizations), documented and expressed in currency, related to the movement of funds or material assets ^[14].

Taking into account the fact that transactions are carried out within the framework of tax legal relations, therefore, they affect the tax obligations of the parties, which has its own tax effect, expressed in the calculation and payment of the corresponding tax.

In connection with the above, the following definition of "operation" can be given for the purposes of tax law. An operation is a legal action of subjects of tax legal relations aimed at establishing, changing or terminating tax rights and obligations.

Now it is necessary to determine what is meant by the concept of "cross-border" in tax law.

The Russian doctrine of tax law does not raise the question of what is meant by the above definition. At the same time, taking into account the fact that tax legal relations are a consequence of civil legal relations, it is fair to refer to the relevant provisions of civil law. Thus, the Russian doctrine knows the concept of "cross-border transaction". For example, V. A. Musin considered a cross-border transaction as a transaction made for commercial purposes by persons of various nationalities and entailing the emergence, modification or termination of the spectrum of civil rights and obligations related to the creation, use or realization of material goods or other results of human activity ^[15].

Therefore, the peculiarity of a cross-border transaction is the presence of a foreign element in it.

Of particular interest is the position of the Ministry of Finance of the Russian Federation (hereinafter referred to as the Ministry of Finance of the Russian Federation), which, in accordance with Article 34.2 of the Tax Code of the Russian Federation is the body explaining the application of the legislation of the Russian Federation on taxes and fees. Thus, the Ministry of Finance of the Russian Federation in its letters (Letter No. 03-01-18/14680 of the Department of Tax and Customs and Tariff Policy of the Ministry of Finance of the Russian Federation dated March 18, 2015, No. 03-01-18/22698 of the Ministry of Finance of the Russian Federation dated June 18, 2013) understands cross-border transactions as transactions that result in tax consequences in several jurisdictions.

A narrower approach to understanding a cross-border transaction (operation) was taken by the Presidium of the Supreme Court of the Russian Federation, which understands transactions between Russian taxpayers and tax residents of foreign states by a cross-border operation (Review of the practice of court consideration of cases related to the application of certain provisions of Section V.1 and Article 269 of the Tax Code of the Russian Federation (approved by the Presidium of the Supreme Court of the Russian Federation on 16.02.2017).

It is difficult to agree with the above approach, since a transaction is a narrower definition than an operation. For example, the payment of dividends or remuneration for the use of the results of intellectual activity will not be recognized as a transaction, but they will be recognized as transactions for the purposes of calculating the corresponding tax payments. Therefore, we cannot correlate these definitions for the purposes of tax law, since the operation is a broader definition, which also includes various kinds of transactions.

Thus, by a cross-border operation, we can understand the legal actions of subjects of tax relations complicated by a foreign element aimed at establishing, changing or terminating tax rights and obligations, as a result of which tax consequences arise in several jurisdictions.

Now let's consider the content of tax relations in the field of cross-border transactions. In the legal doctrine, the content of legal relations traditionally includes subjective law and legal obligation ^[16]. The issue of the content of the rights and obligations of taxpayers, tax agents, the powers of tax and other authorized bodies is not debatable in the legal doctrine, as it is regulated in detail by the legislation of the Russian Federation, including the Tax Code of the Russian Federation.

Due to the fact that relations in the field of taxation of cross-border transactions are a kind of tax relations, it is fair to agree that the rights and obligations of the rights and obligations of taxpayers and tax authorities are interrelated ^[17]. As S. D. Tsypkina and N. I. Khimicheva correctly point out, the main content of tax relations is the obligation of a taxpayer or tax agent to contribute an appropriate amount to the budget system of Russia, and the obligation of competent authorities to ensure the payment of taxes ^{[18, 19]}. Also, this position is supported by S. G. Pepelyaev ^[20]

At the same time, relations in the field of taxation of cross-border transactions have their own specifics, which follows from the subject composition (the presence of a foreign element) and a special object (a cross-border operation). All this can lead to a situation where a person has special responsibilities that are only relevant in the framework of cross-border transactions. For example, when applying the provisions of international treaties of the Russian Federation, a foreign organization that has the actual right to receive income must provide the tax agent paying such income with confirmation that this foreign organization has a permanent location in the state with which the Russian Federation has an international agreement (Article 312 of the Tax Code of the Russian Federation). At the same time, this obligation corresponds to the right of a foreign organization to apply an appropriate international agreement, for example, a reduced corporate income tax rate when paying dividends.

Thus, in addition to the general rights and obligations that apply to all taxpayers and tax agents, individuals may have special rights and obligations when carrying out cross-border transactions.

In connection with the above, it can be concluded that tax relations in the field of taxation of cross-border transactions have their own specifics. Firstly, this is due to the presence of a foreign element in these tax relations, that is, a foreign person will always act as one of the parties to the transaction, as a result, the participants are connected by different jurisdictions. Secondly, rights and obligations are acquired within the framework of a cross-border operation, that is, there is a special object of legal relations. Thirdly, the presence of a special subject composition and object affects the content of legal relations of persons, which is expressed in the presence of special rights and obligations of the parties to a cross-border operation.