Tax Compliance Managing Partner Mikhail Begunov and Tax Compliance Senior Tax Consultant Fyodor Petrik analyze and explain for the taxpayer the main aspects of a motivated opinion in tax monitoring in an article of the Tax Policy and Practice magazine.

One of the main advantages of tax monitoring is the possibility for a taxpayer to receive a motivated opinion of the tax authority. Motivated opinion is an explanation of the tax authority on the issues of correctness of calculation (withholding), completeness and timeliness of payment (transfer) of taxes, fees, insurance contributions, as well as the correctness of determination of costs by a party to an agreement on protection and promotion of capital investment [1, paragraph 1 of Art. 105.30]. It can be prepared both on the initiative of the tax authority, if in the process of monitoring it has identified any violations, and at the request of the taxpayer [1, paragraph 2 of Art. 105.30].

The formation of a reasoned opinion on the initiative of a tax authority conceptually corresponds to the execution of a tax audit act, since in fact it is an offer to a taxpayer to voluntarily adjust its tax liabilities without the imposition of penalties and fines.

If incorrect calculation, as well as inadequate or untimely payment of taxes, fees, insurance contributions is revealed within the framework of tax monitoring, the tax authority within 10 days sends a notice to the taxpayer that there are grounds for a reasoned opinion [1, paragraph 2.1 of Art. 105.29]. The notice describes the violation committed, provides supporting facts and proposals to correct violations. The taxpayer has the right to submit explanations or already at this stage before the issuance of a reasoned opinion to correct violations. If the tax authority does not agree with the taxpayer's explanations, it proceeds to the issuance of a reasoned opinion.

A request for a reasoned opinion at the initiative of a taxpayer may relate both to transactions previously completed (before July 1 of the year following their completion) and those planned for the future. The request is sent in a special form with accompanying documents. In this case, the tax authority in the process of preparing a reasoned opinion may request additional documents and information. The taxpayer shall provide the following information in the request:

• a detailed description of the disputed transaction or operation, including the main terms and details of the documents formalizing it;
• counterparty information;
• A methodological position on a controversial issue;
• description of the issue [1, paragraph 4.1 of Art. 105.30].

A reasoned opinion is binding on both the taxpayer and the tax authority, unlike clarifications of the Ministry of Finance of Russia, which are of an informational and explanatory nature, i.e. are not binding on taxpayers. Therefore, it is extremely important for taxpayers to take a careful approach to the formation of a request for a reasoned opinion in order to obtain a result that meets expectations.

From April 1, 2024, taxpayers have the right to withdraw a request for a reasoned opinion before it is drawn up by the tax authority, and the tax authority - to leave an incorrect request without consideration; at the same time, the taxpayer will retain the right to repeat the request in respect of the same circumstances [2, subparagraph "b" of paragraph 42 of Art. 1].

Working with reasoned opinions is a new level of interaction between a taxpayer and a tax authority within the framework of tax control measures. Read more about the possibilities and work with this tool in the article at the link.