Zenden shod taxmen
Now the company will have to pay 1.1 billion rubles of lost taxes and fines. The First Arbitration Court of Appeal rejected Dom Odezhda LLC's request to overturn the decision of the Interdistrict Inspectorate of the Federal Tax Service (FTS) No. 13 for the Vladimir Region, which demanded nearly 600 million rubles from the company in uncollected taxes.
This comes from his ruling, published in mid-December 2022. Therefore, the court confirmed the first instance's decision, which is now final. Including fines and penalties, Zenden will need to pay around 1.1 billion rubles to the budget. The Federal Tax Service did not respond to Vedomosti’s request. The retailer's representative states that the company will seek to overturn this decision in a higher court.
IFTS No. 13 for the Vladimir Region audited the Zenden structure for the years 2013–2015, determining that 22 individual entrepreneurs, to whom Dom Odezhdy LLC supplied shoes purchased abroad, were controlled by the company itself and proceeds were siphoned from them. As a result of this scheme, the company's tax burden was reduced by 43.6%. In 2019, Dom Odezhda filed a lawsuit challenging the tax authorities' decision, ultimately leading to a upheld decision by the Court of Appeal.
During the inspections, Zenden had approximately 350 wholesale buyers, but the tax authorities singled out only 22 individual entrepreneurs as being “controlled” by the group, according to Pavel Chaltsev, the company's financial director. He denies this claim, stating that the tax inspectorates at the individual entrepreneurs' place of registration issued certificates of independence and non-control to everyone. It is worth noting that some entrepreneurs had a 20-year history of shoe trading before Zenden and did not appear to be part of a scheme to siphon proceeds, according to Alexander Korolev, author of the Lawyer in a Restaurant channel. Additionally, some of them had business other than selling shoes, such as repairing special equipment.
Due to tax risks, the network was compelled to terminate contracts with all individual entrepreneurs, according to Chaltsev. Claims for damages and contract preservation have already been received from some entrepreneurs. One case has already resulted in a decision against terminating the contract for Dom Odezhdy LLC, while simultaneously the tax authorities' decision to charge additional income tax and VAT for this entrepreneur was upheld, causing Chaltsev's outrage. He also points out that if the appeal upholds the court decision, the tax service will be able to impose additional taxes on any franchise network working with counterparties.
Anna Kononova, head of the antimonopoly practice of the Tsentralny Okrug law firm, draws attention to the fact that, according to the court’s conclusions, many processes with the mentioned individual entrepreneurs went through the central office of Zenden – for example, bills for renting premises, security, sick leave were coordinated there. All this suggests that these entrepreneurs were not independent. According to Kononova, if the network does not pay the debt voluntarily, then the tax office should start the enforcement procedure. The retailer, as the lawyer points out, can challenge this by filing a new lawsuit indicating violations of the deadlines for issuing a claim on the part of the inspection. According to the Tax Code, this had to be done within two years after the audit. A similar basis was in the dispute between another shoe retailer, Ralph Ringer JSC, and the Moscow tax inspectorates No. 15 and 18. The latter missed the legal deadlines, so at the end of December, the capital’s arbitration recognized the recovery of almost 1.5 billion rubles. taxes, insurance premiums, fines and penalties illegal.
With Zenden, the situation is still somewhat different, the company, unlike Ralph Ringer, did not declare that the deadlines were missed in the first and appeal instances, so the retailer will not be able to avoid liability, Alina Shleeva, a lawyer at the Propositum Law Office, does not agree. IEF Legal Advisor Denis Kozhevnikov agrees with her. According to him, judicial practice shows that taxpayers’ attempts to avoid paying additional charges on procedural grounds often end in failure for them. As an example, he cites the case of the Avtomonolit company, which in 2022 was unable to challenge the additional charge of about 300 million rubles. taxes and penalties. And the decision on Ralph Ringer has not yet been confirmed by the Court of Appeal, Kozhevnikov notes.
The Zenden network includes 250 own branded retail outlets and about 150 more franchised stores throughout Russia, where shoe brands Zenden, Instreet, Quartocomforto, Pulse, Martiseta and others are represented. In 2021, the revenue of Dom Odezhdy LLC increased by 23% to RUB 14.48 billion, net profit amounted to RUB 294.41 million. against a loss a year earlier.
