The FTS revealed criteria which may allow taxpayers to avoid additional control. Tax authorities are convinced that the formation of a unified approach will stimulate taxpayers to observe the TC and to refuse minimization of taxes. Public release of the criteria will help to inform the taxpayer of certain “game rules” which they should follow to avoid the “risk zone”.
Taxpayers who would like to reduce visits from tax authorities can accept these unspoken rules. And their intentions to leave minimization and pay the taxes in full are obvious even from their financial reporting, say representatives of FTS.
Taxpayers may evaluate their likelihood of getting on the auditing list. For this purpose the FTS reveals eleven criteria which will serve tax authorities as a signal for action:
1. A company’s tax burden is below average for economic entities in a specific industry.
2. Reporting in financial or tax accounting losses during several tax periods.
3. Reporting in tax accounting significant amounts as tax rebate for definite period of time.
4. The growth rate of the company’s expenses exceeds the growth rate of sales proceeds.
5. The average monthly salary for one employee is below average for this type of economic activity in constituent entity of RF.
6. A company’s multiple converging to limiting value of indicators established by the TC allowing taxpayer a right to use preferential tax treatment.
7. A company builds its financial and business activity on the contracts with contractors/sub-purchasers or intermediate agents (contractor chain) without rational economic or other reasons (business purpose).
8. Failure of a taxpaying company to submit clarification for a notice from tax authority regarding discrepancy in performance indicators.
9. Multiple deregistration and re-registration of the taxpayer with tax authority due to change of location (migration between tax authorities).
10. An individual entrepreneur reporting the amount of expenditures maximally close to the amount of his profit received during the calendar year.
11. Significant deviation of profitability level according to financial accounting from the level of profitability for given field of activity based on statistics data.
As a matter of principle the listed criteria is nothing new. The only important thing is its publication. For the first time tax authorities have openly announced how they will plan their inspections, the experts say. Before all the decisions were made by FTS authorities and regulated only by internal instructions.
This is encouraging news for business – shaping of understandable game rules cannot but help it.
The FTS also published unitary standards of working with taxpayers which cover practically all areas of work of tax service. This information is presented in tabular form on the FTS website.
It spells out time constraints of tax service activities and procedures and also in what form they are to be rendered. It also lists legislative and regulatory legal acts which specify the procedures regarding services of state registration, introduction of alterations and furnishing of information from Unified State Register of Legal Entities and Unified State Register of Individual Entrepreneurs. Also, about acceptance of tax declarations, state registration and deregistration, registration of individual entrepreneur’s Ledger of profits and losses and entering TIN information into taxpayer’s passport.
By experts’ opinion, tax authorities succeeded in spelling out most of interactions between taxpayers and inspectors, and marking specific time schedule for all services. For example, FTS promises taxpayers that waiting in line for services should not exceed 30 minutes, and during peak demand – not more than one hour. Among other normative standards – furnishing of electronic data from Registers of legal entities and individual entrepreneurs should not take more than five day from the time of application. Entering TIN information in the passport should be done in the taxpayer’s presence. Confirmation of receiving tax declaration in electronic form must be sent during one day from the moment of sending of documents. One more interesting point – distribution of information at the written inquiry from taxpayer must be completed not later than 30 days from the time of inquiry.
We will hope that tax inspectors will keep the listed recommendations.
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