The field tax inspection is one of the most strict and detailed forms of control applied by the Russian tax authorities. The financial and economic activities of the company for a specific period are analyzed during the inspection. These inspections often include a visit of inspectors to the enterprise to study primary documents and other data. The results of inspection can lead to additional charges of taxes, penalties, fines and even become the basis for litigation. In the Newsletter, we inform why it is important to check counterparties for tax risks, how to do it yourself, and how Globas can help.
Tax risk criteria and how companies fall under the attention of tax authorities
The purpose of the field tax inspection is verify the accuracy of the calculation, withholding and transfer of taxes to the budget. When choosing companies for inspections, the tax authorities are guided by certain risk criteria that reflect both the financial and organizational characteristics of the company. These criteria are specified in the Concept for planning field inspections of the Federal Tax Service and are divided into several categories:
1. Tax risks:
- tax burden below the industry average
- losses over several accounting periods
- significant amounts of tax deductions
- discrepancy between the growth rates of expenses and income
- the minimum difference between income and expenses for individual entrepreneurs
- frequent change of tax authority
2. Partners-related risks:
- transactions with counterparties with signs of suspicious activities
- lack of clarifications for requests from the Federal Tax Service
- cooperating with companies that are in the tax risk zone
3. Risks associated with non-compliance with market and regulatory requirements:
- salaries of employees are below the industry average
- exceeding limits on special tax regimes
- deviation of profitability from the industry average
It is important to understand that not only the company itself, but also its business partners may fall under the risks. Cooperation with unreliable counterparties can raise questions from the tax authorities, even if the company complies with all the requirements. Therefore, checking partners for compliance with risk criteria is an important part of tax control and business protection.
Why it is important to check counterparties for compliance with tax risk criteria
Cooperation with counterparties inevitably leads participation in a common chain of financial transactions. If one of the partners violates tax requirements, this can create risks for other participants. The main reasons why to check partners:
Financial stability. An unreliable partner could be at the centre of a tax investigation, which would jeopardize its solvency and cause problems for your business.
Reputational consequences. Cooperation with counterparties that raise questions for tax authorities can have a negative impact on your company's reputation.
Tax risks. If a partner violates the law, transactions may be recognized as fictitious, which will lead to a revision of tax obligations and possible fines.
Checking partners is not just a formality, but a way to avoid financial and reputational losses.
How to independently check the counterparty for tax audit risks
Several approaches can be used to check partners:
- Services of the Federal Tax Service. For example, you can use a tax calculator which allows you to assess the tax burden and compare it with industry averages.
- Analysis of financial statements. Financial statements is useful to identify key indicators - the average salary of employees, profitability, losses for reporting periods and other metrics.
- Data from the Unified State Register of Legal Entities. The Register contains information about re-registrations and changing of the tax authority.
- Registers of the Federal Tax Service. Allow you to check debts, basic information on the company and its status.
However, self-made analysis requires time, skills and access to different sources. Therefore, a convenient solution may be to use automated systems like Globas, which allow you to quickly obtain a comprehensive assessment of a partner.
How Globas helps check counterparties for the field tax inspection criteria
Globas includes a special "Risk of tax inspection" section, which allows you to quickly assess companies and their counterparties for tax risks.
The section is created on the basis of the Concept of the planning system for field tax audits, approved by the Order of the Federal Tax Service of Russia No. MM-3-06/333 @ dated May 30, 2007. The concept contains a list of 12 publicly available criteria recommended for self-made assessment of tax risk.
In Globas, an automatic check is carried out under 12 criteria, which eliminates the need to independently carry out calculations, search for industry averages figures or collect data from open sources.
The section presents ready-made analysis results for each criterion with corresponding conclusions. Detailed information on the calculation of indicators and on what data it is based on is also available.
The Risk of tax inspection section allows you to quickly obtain information about the company's tax risks, while minimizing the labor costs of the expert responsible for the inspection.
Check your counterparties for tax risks quickly and conveniently using Globas. Get trial access and evaluate all the features of the service.
