Tax control and digitalization

Tax control and digitalization

Kommersant Publishing House website published an article dedicated to the "Annual CFO Forum" held in St. Petersburg.

Mikhail Begunov, managing partner of Tax Compliance, speaking first in the session, singled out three points of the tax status of the business within the relationship with the tax authority.

"The first option for tax planning is that the company is above the tax monitoring process. This is a mature company that is mentally and technically ready to move to the stage of tax monitoring and disclose itself to the Federal Tax Service (FTS). Tax control and digitalization are closely linked. With a rapidly changing business environment and the development of new technologies, authorities are increasingly focused on using digital technology to monitor tax payments. Digitalization of tax control allows to automate processes, reduce the time spent on the work of tax authorities, eliminate the human factor in receiving and processing data, and achieve maximum accuracy and efficiency of control.

The second way is manual management of the tax process," when a business selects and creates its own tax department and manages its tax risks". It is at this stage, according to the experience of Tax Compliance, when companies more often get calls to the Commission and demands to clarify the tax base.

The third option is "in the crosshairs of tax control. That is, the company has already been claimed by the tax authority or is at the stage of a tax audit. Companies often confuse the statuses, implying that they are engaged in manual control, but in fact they are already in the crosshairs, said the expert. According to him, being at this stage, it is necessary to carefully study each industry claim of the Federal Tax Service.

In many cases, even during an audit, the Federal Tax Service is willing to share information and talk about problems. A communication strategy with the control authorities can reduce financial costs and lead to normal structural interaction with the FTS," summarized Mikhail Begunov, managing partner of Tax Compliance.

"There are fewer tax audits only in covid 2020, when there was an outright ban. According to the Russian government decree of April 3, 2020 and the order of the Federal Tax Service of Russia of March 20, 2020, the moratorium on inspections of compliance with the requirements of Russian legislation on the use of cash registers, including the order of cash and cash transactions, was provided until the end of 2020. Thus, from January 1, 2021 the tax authorities carry out the aforementioned control measures", - said Senior Tax Compliance Consultant Alexei Stanchin.

The expert notes that not all decisions remain in force after the control measures have been taken. According to the results of the report, tax liabilities are reduced by 28% on appeal, in terms of quantity this is about 32% of tax audits. To reduce the additional charges, as the expert notes, it is possible in court. "Based on the results of the report of the Accounting Chamber, we can say that it is a small amount - only 25%. It is important to understand that the amount of judicial reduction can be both full and partial. Most often this reduction is partial, i.e. the company will not be able to reduce the amount it has to pay in full", said Alexey Stanchin, senior tax consultant at Tax Compliance.

Read the full article here.