Chapter 12. Offset and Refund of Overpaid or Over Collected Amounts

Article 78. Set offset or Refund of Overpaid Amount of Tax, Fee, and Also Penalty Interest

1. The amount of an overpaid tax shall be set off against the taxpayer's future liabilities for the same tax or some other taxes, the repaying of arrears or shall be refunded to the taxpayer according to the procedure established in this article.

2. The set off or refund of an overpaid tax is made, unless otherwise decreed by this Code, by the tax authority at the place of registration of the taxpayer without interest accruing on this amount, unless otherwise decreed in this article. The customs authorities shall inform the local tax authority at the taxpayer's location concerning all overpaid taxes which were counted towards the forthcoming taxes or were repaid by customs agencies within ten days.

3. The tax authority shall notify the taxpayer about every case of overpaid tax that becomes known to the tax authority and specify the overpaid amount of tax not later than one month after such overpayment has been identified.

In case of disclosing facts testifying to a possible excessive payment of a tax, the tax body shall have the right to send to a taxpayer its proposal on a joint checking of paid taxes. The checking results shall be completed with a report to be signed by the tax body and the taxpayer.

4. The setoff of an overpaid tax against forthcoming tax liabilities shall be made on the strength of a written petition of the taxpayer by decision of a tax body. Such decision shall be passed during five days after the receipt of an application, provided this sum of money is paid to the budget (extra-budgetary fund), to which the excessively paid amount of the tax was sent.

5. Upon request by the taxpayer and by decision of a tax body, the overpaid tax amount may be used to fulfil obligations relating to the payment of taxes or fees, the payment of penalty interest, the repayment of arrears if such amount comes to the same-level public budget (off-budgetary fund) to which the overpaid tax or charge amount comes. Tax authorities may at own discretion make a setoff if there are arrears relating to other taxes.

6. The tax authority shall notify the taxpayer of the passed decision on a setoff of an overpaid tax within 2 weeks of the submission of a setoff petition.

7. An overpaid amount of tax or charge is refundable upon a written request from the taxpayer. If a taxpayer has arrears for payment of taxes and dues or for debts penalties charged to the same budget/extra-budgetary fund), the excessively paid sum of money shall be repaid to a taxpayer only after the offset of the said sum of money on account of the repayment of arrears (debts).

8. A petition requesting the refund of an overpaid tax or charge may be made within three years of the payment of the specified amount.

9. An overpaid amount of tax is refunded at the expense of the budget (extra-budgetary fund) to which overpayment was made within one month of the submission of a petition requesting the refund unless otherwise decreed by this Code.

If above deadlines are not met, the overpaid amounts of tax or charge that are not refunded in due time accrue interest for each day of delayed refund.

The interest rate is equal to the refinancing rate of the Central Bank of the Russian Federation effective on the day when the time frame for refunding is initially violated. If the tax was paid in foreign currency, interest fixed by this item shall be added to the sum of the excessively paid tax, which was recalculated at the exchange rate of the Central Bank of the Russian Federation on the day when the excessive tax payment was made";

10. An overpaid tax or charge is refunded or set off in the currency of the Russian Federation. If tax payment was made in foreign currency, the amounts of the excessively paid tax shall be accepted for an offset or shall be repaid in the currency of the Russian Federation at the exchange rate of the Central Bank of the Russian Federation on the day when the excessive tax payment was made.

11. Rules of this Article shall also apply to offsets or refunds of over paid amounts of a fee and interest and be extended to tax agents and payers of fees.

12. The rules provided for by this Article shall also apply in case of the offset or the repayment of the excessively paid amount of the tax and the due in connection with the movement of goods across the customs border of the Russian Federation. The customs agencies shall enjoy the rights and bear the duties provided for by this Chapter for the tax bodies.

13. The rules stipulated by this Article shall also apply in case of the offset or the repayment of the excessively paid sums of the tax and the due incoming to the governmental extra-budgetary funds. The agencies of the governmental extra-budgetary funds exercising control over the payment of said taxes and dues shall enjoy the rights and bear the duties provided for by this Chapter for the tax bodies.

Article 79. Refund of Overpaid Tax or Charge

1. An overpaid amount of tax is refundable to the taxpayer. If a taxpayer has tax and due arrears or indebtedness on penalties due to the same budget (extra-budgetary fund), the excessively collected sum of money shall be repaid to the taxpayer only after the offset against the redemption of the arrears or the indebtedness.

2. A decision on the repayment of the excessively collected tax shall be taken by a tax body on the basis of a written application by the taxpayer from whom this tax was collected within two weeks since the day of the registration of the said application. A court of shall take such a decision by way of an action in legal proceedings.

A petition for the refund of an overpaid tax may be filed within one month of the date on which the over collection case was made known to the taxpayer, while a court petition (lawsuit) may be filed within three years starting from the date on which the person became knowledgeable or should have become knowledgeable of the over case.

If an overpayment case is recognized, the authority considering the concerned person's petition also takes a decision to refund the overpaid tax, and also interest accrued on these amounts in a manner prescribed by Item 4 of this Article.

3. Having identified the over case, the tax authority shall be required to let the taxpayer know about it within one month from the date on which the case was identified.

4. An overpaid amount of taxis refunded with the interest accrued thereon at the expense of general receipts by the budget (extra-budgetary fund), to which the amounts of the excessively collected tax were charged.

Interest on this amount accrues starting on the day following the collection day to the day on which the amount is actually refunded.

The interest rate is equal to the effective on these days refinancing rate of the Central Bank of the Russian Federation.

5. An overpaid amount of tax and the interest accrued thereon shall be refunded by the tax authority not later than one moth since the day of the adoption of the decision by a tax body and during one moth after the adoption of such decision, if a court of law passes a decision on the repayment of the excessively collected sums of money.

6. Refund of the overpaid tax and the interest accrued shall be made in the currency of the Russian Federation.

7. Rules of this Article shall also apply to fees and interest and be extended to tax agents and payers of fees.

8. The rules stipulated by this Article shall also apply when the excessively collected amount of the tax or the due was repaid in connection with the movement of goods across the customs border of the Russian Federation.