Tax monitoring as a new form of control was introduced in a separate section "V.2." in part one of the Tax Code of the Russian Federation by the Federal Law No. 348-FL of November 4, 2014.

Tax monitoring consists in providing tax authorities with access to taxpayers' accounting records for real-time control. If errors are found in accounting, the tax authorities are obliged to inform taxpayers about this.

This form of control is possible only upon a voluntary application of taxpayers and a decision of the tax authorities under the certain conditions.

The Federal Law No. 470-FL of December 29, 2020, amended the RF Tax Code providing for a significant reduction in the criteria for tax monitoring.

In particular,

• the amount of taxes paid for a calendar year has been reduced from 300 to 100 million RUB;
• the annual total volume of income received and total value of assets has been reduced from 3 to 1 billion RUB.

In addition, the changes affected the grounds for conducting on-site inspections for the period when tax monitoring is carried out. Thus, on-site inspections are carried out in case of non-fulfillment by the taxpayer of the reasoned conclusions of the tax authorities before December 1 of the year following the period of tax monitoring. Previously, this period was not set. Clarification of tax returns with an increase in loss can also be a reason for on-site inspections.

The amendments also provide for:

• the right of officials of tax authorities conducting tax monitoring to demand from counterparties or other persons documents or information regarding the activities of taxpayers;
• the duty of tax authorities to notify taxpayers in electronic form about the appearance of grounds for early termination of tax monitoring and the right of taxpayers to provide appropriate explanations in this regard.

According to the Federal Tax Service of the Russian Federation, in 2017 tax monitoring was carried out in 21 organizations, in 2020 - in 95. Based on the results of consideration of the submitted applications, in 2021 this form of tax control will be applied for 209 companies.

Reducing the criteria for tax monitoring provides the potential for such control to be carried out on more than 5,000 taxpayers. Calculations are based on the data from the Information and Analytical system Globas.

Information agency Credinform has prepared a review of trends in manufacture of refrigerators and ventilation equipment.

The largest companies (ТОP-1000) in terms of annual revenue were selected according to the data from the Statistical Register and the Federal Tax Service for the latest available periods (2014 - 2019). The company selection and analysis were based on data of the Information and Analytical system Globas.

Net assets is a ratio reflecting the real value of company's property. It is calculated annually as the difference between assets on the enterprise balance and its debt obligations. The ratio is considered negative (insufficiency of property), if company’s debt exceeds the value of its property.

The largest company in terms of net assets is LLC VEZA, INN 7720040225, Moscow region. In 2019 net assets of the company amounted to almost 5,5 billion RUB.

The smallest size of net assets in TOP-1000 had JSC DZERZHINSKHIMMASH, INN 5249014667, Sverdlovsk region, the legal entity is declared insolvent (bankrupt) and bankruptcy proceedings are initiated, 01.12.2017. The lack of property of the company in 2019 was expressed in negative terms -5,6 billion RUB.

For the last six years, the average industry values of net assets showed the decreasing tendency with negative dynamics of growth rates (Picture 1).

Picture 1. Change in average net assets value in 2014 – 2019

For the last six years, the share of ТОP-1000 enterprises with lack of property had the negative growth trend (Picture 2).

Picture 2. The share of enterprises with negative net assets value in ТОP-1000 in 2014-2019

Sales revenue
In 2019, the total revenue of 10 largest companies amounted to 37% from ТОP-1000 total revenue (Picture 3). This fact testifies the high level of monopolization in the industry.

Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2019

In general, the growing trend in sales revenue with positive dynamics of growth rates is observed (Picture 4).

Picture 4. Change in average revenue in 2014 – 2019

Profit and loss
The largest company in terms of net profit is JSC POLAIR-REAL ESTATE, INN 7703721898, Mari El Republic. In 2019 the company’s profit amounted to more than 1,5 billion RUB.

For the last six years, the average profit values show the growing tendency with the negative dynamics of growth rates (Picture 5).

Picture 5. Change in average profit (loss) in 2014 – 2019

Over a six-year period, the average net profit values of ТОP-1000 show the growing tendency, along with this the average net loss is decreasing (Picture 6).

Picture 6. Change in average net profit/loss of ТОP-1000 companies in 2014 – 2019

Main financial ratios
For the last six years, the average values of the current liquidity ratio were higher than recommended values - from 1,0 to 2,0, with growing trend (Picture 7).

The current liquidity ratio (ratio of total working capital to short-term liabilities) shows the sufficiency of company’s assets to meet short-term obligations.

Picture 7. Change in average values of current liquidity ratio in 2014 – 2019

Within six years, the growing trend of the average values of ROI ratio is observed (Picture 8).

The ROI ratio is calculated as a ratio of net profit to sum of stockholder equity and long-term liabilities and shows the return from equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in average values of ROI ratio in 2014 – 2019

Assets turnover ratio is the ratio of sales revenue and company’s average total assets for a period. It characterizes the effectiveness of using of all available resources, regardless the source of their attraction. The ratio shows how many times per year the full cycle of production and circulation is performed, generating the corresponding effect in the form of profit.

For the last six years, this business activity ratio demonstrated the decreasing trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio in 2014 – 2019

Small businesses
92% of ТОP-1000 companies are registered in the Unified register of small and medium-sized enterprises of the Russian Federal Tax Service. Herein, their share in TOP-1000 total revenue is 38%, which is significantly higher than the national average value in 2018 – 2019 (Picture 10).

Picture 10. Shares of small and medium-sized enterprises in ТОP-1000

Main regions of activity
TOP-1000 companies are registered in 65 regions of Russia and are unequally located across the country. Almost 49% of the largest enterprises in terms of revenue are located Moscow region and Moscow (Picture 11).

Picture 11. Distribution of TOP-1000 revenue by the regions of Russia

Financial position score
An assessment of the financial position of TOP-1000 companies shows that the largest part have average financial position (Picture 12).

Picture 12. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
Most of TOP-1000 companies got superior/high and strong/medium Solvency index Globas , this fact shows the ability of the companies to meet their obligations in time and fully (Picture 13).

Picture 13. Distribution of TOP-1000 companies by Solvency index Globas

Conclusion
A complex assessment of the manufacturers of refrigerators and ventilation equipment, taking into account the main indexes, financial ratios and indicators, demonstrates the presence of positive trends within 2014-2019 (Table 1).

Table 1. Favorable and unfavorable trends, assessment factors

Trends and assessment factors	Relative share, %
Dynamics of average net assets value	-10
Growth/drawdown rate of average net assets value	-10
Increase / decrease in the share of enterprises with negative net assets	-10
The level of capital concentration	-10
Dynamics of average net profit	10
Growth/drawdown rate of average revenue	10
Dynamics of average profit (loss)	10
Growth/drawdown rate of average profit (loss)	-10
Increase / decrease in average net profit of companies	10
Increase / decrease in average net loss of companies	10
Increase / decrease in average values of current liquidity ratio	5
Increase / decrease in average values of ROI ratio	10
Increase / decrease in average values of assets turnover ratio, times	-10
Share of small and medium-sized businesses by revenue more than 22%	10
Regional concentration	-10
Financial position (the largest share)	5
Solvency index Globas (the largest share)	10
Average value of factors	1,2

favorable trend (factor), unfavorable trend (factor)