Assessing the risk of a field tax audit using Globas

In the context of the new economic reality, the Government of the Russian Federation, in order to ensure financial stability and mitigate the consequences of restrictive measures, made a number of indulgences concerning tax audits:

• check on compliance with the currency legislation are suspended;
• IT companies accredited in the territory of the Russian Federation are exempted from field tax audits.

You can check whether your company belongs to accredited IT organizations in Globas.

It is important that the introduced relaxations affect only a part of organizations and do not exempt taxpayers from complying with tax laws. At the same time, the task of checking tax collection for the Federal Tax Service remains relevant. Despite the fact that the number of field tax audits has been decreasing in recent years, their effectiveness is growing.

In 2021, the Federal Tax Service conducted 7,765 field audits, which is 14% less than in the pre-pandemic 2019. However, as a result of such actions, the business received additional taxes of 383 billion RUB, including penalties and fines. The average cost of audit is 50 million RUB, which is almost twice as much as in 2020. At the same time, 99% of appeals to the Federal Tax Service remain unsatisfied. In arbitration courts, the tax service also wins more often.

At the St. Petersburg International Economic Forum, the President of the Russian Federation emphasized the need to cancel most business inspections. The Federal Tax Service also took a course to reduce the number of inspections by increasing their quality. Taking into account the current trends at the end of the full 2022, the experts of the Credinform Information Agency predict a decrease in the number of inspections to the level of the pandemic 2020. At the same time, the effectiveness of tax penalties may remain at the level of the record 2021 year.

Types of tax audits

According to the Tax Code of the Russian Federation, there are two types of tax audits: on-site and field tax audits.

Office tax audit lasts no more than three months. The tax inspector remotely analyzes the submitted declaration and evaluates the correctness of the tax calculation. If inaccuracies or contradictions are found, the missing amounts are charged for payment, fines and penalties are imposed, and a requirement to prepare an adjustment declaration may also be made.

During a field audit, the tax inspector goes to the business owner's place for a thorough examination of the reporting. The correctness of tax calculation, their timely payment and possible VAT evasion are controlled, documents on transactions with counterparties are checked. The inspection has the right to examine the company, conduct conversations with employees, analyze the activities of branches and representative offices.

In addition to the Federal Tax Service, inspectors from other services can also come to the enterprise with a field inspection.

Check in Globas whether your company or a counterparty is included in the summary plan of inspections of the Prosecutor General's Office in order to prepare in advance for the visit of government agencies. A full list of inspections is available in Globas, and conclusions of inspectors are already available for many of them.

Risk criteria for evaluating a field tax audit

You can reduce the risk of meeting with the tax authority as part of a field audit by taking into account the criteria that FTS inspectors follow when choosing candidates for their visit. Similar criteria should be applied to evaluate your counterparties.

Here are some of them:

1. The tax burden is below the industry average.
2. The average monthly wage per employee is below the industry average.
   If the indicators do not correspond to the average values for the industry in the region, then the likelihood of a field tax audit increases.
3. Excess of expenses over income for several tax periods.
   If the are constant losses, the Federal Tax Service may assume that the business owners are hiding income or a wish to liquidate the organization.
4. Re-registration of the taxpayer in the IFTS.
   'Migration' between tax authorities can be interpreted by inspectors as an attempt to avoid inspections and evade taxation.
5. Conclusion of a deal with dubious counterparties.
   Checking the business partner before the conclusion of the contract must be carried out and carefully recorded.

These are the main criteria that the Federal Tax Service pays attention to when planning a visit with an inspection on the enterprise. However, the full list is much longer. It was approved by order No. MM-3-06/333@ of the Federal Tax Service of Russia dated May 30, 2007 in the form of a “Concept for the planning system for field tax audits”.

Globas users have access to ready-made reports on enterprises, where, in addition to the official criteria of the Federal Tax Service, many indirect factors are analyzed, to which the tax inspector additionally pays attention. 90 criteria of the Federal Tax Service and 120 criteria of full compliance control are checked. Download a ready-made report for your own company or for your counterparties and assess the degree of risk of a field tax audit. If you are not a Globas subscriber yet, fill out an application for trial access and check if there are persons with increased risk among your counterparties, the cooperation with which is better to be reconsidered.