In mid 2015 an automated system of controlling tax reporting (so-called ASK NDS-2) was launched by the Federal Tax Authorities. This system allows the comparison of various reporting items and in case there are certain indicators it issues tax requests for clarification automatically.
Development of the system, as well as a step-by-step switch to electronic tax reporting during recent years, has resulted in a considerable increase of tax requests for the provision of documents and information for desk audits and other tax checks. Currently, SCHNEIDER GROUP receives approximately 150 tax requests for its clients per month.
The most frequent types of requests are the following:
- Requests for documents and information needed for tax audits or counterchecks of suppliers and customers;
- Requests to visit the tax authorities to provide explanations on the company’s reported figures (for example to explain reasons of losses);
- Tax penalties, tax fines claims
Below you can find some tips on how to deal with these requests.
Requests for documents and information needed for tax audits or counterparty checks
Tax request must contain the following information:
- the basis for the request (i.e. in regards to which tax audit the documents were requested)
- the period for which the documents should be submitted
- the names of the requested documents (contracts, invoices, consignment notes, etc.) and/or subject for explanations
- the name of the counterparty in relation to which the documents are requested (in case of countercheck)
Note that the tax authorities should only request documents and information that are directly related to the subject of tax audit.
The company has to provide the requested information within:
- 5 working days if the request is caused by mistakes or inconsistences identified in reporting or in case of countercheck
- 10 working days if information or documents are requested
In case of non-provision of the requested information or documents, fines could be imposed on the company in the amount of 200 RUB for each non-provided document.
Request to visit the tax authorities to provide explanations.
The tax authorities may demand that a company official (usually the General Director) visits them in person:
- in connection with the payment (withhold) of taxes and fees;
- in connection with the tax audit;
- in other cases related to tax legislation compliance (for example commission on confirmation of the correctness of the tax base).
In case the reasons are not clearly stated in tax requests we advise to get in touch with the tax authorities in order specify the reason.
The presence of the company’s accountant during the meeting with the tax authorities is also recommended as some questions could be connected with accounting and tax matters.
In case of non-reaction to the tax authorities’ request, administrative fines may be imposed on the General Director.
Tax penalties, tax fines claims
Tax requests must contain the following information:
- the amount of tax due, the amount of penalties accrued at the time the request was issued;
- the due date and the consequences of failure to comply with the requirements.
Usually the payment should be made within 8 working days of receipt thereof if a longer period is not stated in the tax claim.
In case of a company’s failure to make the relevant payment, the tax authorities usually send an instruction to the bank to stop operations and withhold tax debt from the company’s bank account. Thus, we recommend paying tax penalties within the period specified in the tax claim.
Please pay attention to the fact that banks do not process deposits until the penalties are paid and banks get the tax authorities’ confirmation regarding the unblocking of the bank accounts.
At SCHNEIDER GROUP we constantly monitor the tax requests and general tendencies of the tax authorities claims in this regard. We are ready to provide any necessary support in tax requests and claims handling.