Reasons and grounds for the recognition of non-submission of statements: what should businesses do?

Reasons and grounds for the recognition of non-submission of statements: what should businesses do?


Why might a tax authority not accept a report?

Previously, the tax legislation did not establish cases for refusal to accept tax returns (calculations). This, in turn, could affect the quality and timeliness of verification of the accuracy of taxpayers' information. For example, filed a declaration under the signature of an official who, in fact, was a nominal leader. In order to keep under control the organizations that illegally seek financial gain, the innovations in the Articles 80,88 of the Tax Code set a closed list of grounds for refusal to accept the declarations.


Your returns may be found not to have been filed if:

  • - The VAT return does not comply with the control ratios or the insurance contribution calculations contain errors. This situation can occur if you, for example, indicated the wrong OCTMO, TIN, KPP, or if your document simply does not match the standard format (outdated software, incorrect fields, etc.). Also, if the control ratios of tax reporting requirements stated in p. 5.3. art. 174 OF THE TAX CODE OF RF.
  • - The fact of signing the tax return by an unauthorized person has been established. The unauthorized person is the person who signed the statements without power of attorney (except for the manager of the company as the sole executive body or the manager to whom powers were delegated based on the decision of the participants according to the constituent documents of the company).
  • - The tax authority has information about the date of death of an individual, which occurred before the date of signing the tax reports by the enhanced qualified electronic signature of the individual
  • - An entry has been made in the Unified State Register of Legal Entities about the unreliability of information concerning the person having the right to act without power of attorney on behalf of the taxpayer. In particular, this applies to accounts which were signed by an unauthorized person after the recognition that the information about him was unreliable The fact of unreliability of information about the signatory of the declaration can be established on the basis of internal federal resources - if there is information about the head of not confirming his powers by the results of the statement submitted by the individual or by the results of the interrogation of the person in the tax authority. Including if there is information about the death of the signatory of the declaration)
  • - In relation to the taxpayer organization an entry is made in the Unified State Register of Legal Entities about the termination of a legal entity. For example, by reorganization, liquidation or exclusion from the register of legal entities by decision of the registering authority earlier than the date of submission of such person to the tax authority of the declaration. This case of non-acceptance of the tax declaration is related to the fact that the organization must report on its tax liabilities before the termination of its activity, because the reporting period is recognized up to the date of the entry of changes in the state registration of the company.


What awaits businesses if these requirements are not met?

In case of refusal to accept tax reports the organization runs the risk to bring to responsibility under clause 119 of the Tax Code of RF for late submission of tax reports and to administrative responsibility of its officials (clause 4 of article 108 of the Tax Code of RF, clause 15.5 of Administrative Offences Code of RF). In addition to these measures organizations may block bank accounts and electronic money transfers (Clause 6 of Art. 6.1, Clause 3 (1) and Clause 11 of Article 76 of the Tax Code) in time It is also possible cases when VAT deductions from counterparties-buyers are not confirmed until the electronic declaration from the counterparty-supplier is not accepted.

Yulia Pavlova Yulia Pavlova

Yulia Pavlova

Chief Tax Consultant
Industries

Retail, Real Estate and Construction, Manufacturing, Pharmaceuticals, IT Business

Biography

Your declaration has not been accepted. What should you do next?

It is the duty of the tax authority to notify the taxpayer no later than 5 days after the discovery of the relevant circumstance, in terms of cases of discrepancies with the control ratios, a notice will be sent no later than 1 day following the day of filing the return.

The taxpayer is obliged to eliminate violations and submit a revised tax return within 5 days from the date of notification, and only then the tax return will be considered to be accepted by the tax authority. This innovation entered into force in respect of returns filed from 01.07.2021.

In case the tax authority refuses to accept the declaration due to unreasonable circumstances, it is necessary to challenge the actions of the inspectorate with a higher authority and further to the court. In addition, to confirm the powers of the representative who signed the declaration approved the form and format of power of attorney, which previously was not directly regulated by the tax law.

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