Forewarned is forearmed: coming changes in tax inspections and tax documents
On June 2, 2016, Federal Law No.130-FZ “On amending Part I of the Tax Code of the Russian Federation” dated 01.05.2016 (hereinafter the “Law”), amending and clarifying the provisions of the Russian Tax Code as regards tax inspections and tax documents, entered into force:
I. Amendments in force since June 2, 2016
1. The period for new forms/formats of tax declarations/calculations to enter into force is extended to 2 months
According to the general rules new forms/formats of tax declarations/calculations entered into force 10 days after they were officially published.
Starting from June 2, 2016, new forms/formats of tax declarations/calculations and amendments which are entered into current forms/formats, will enter into force no earlier than upon expiry of 2 months from the date they are officially published (see Clause 5 Article 5 of the Russian Tax Code in edition dated 02.06.2016).
2. Amendments being entered into rules for drawing up commercial invoices (‘schet-faktura’) and rules for keeping purchase and sales ledgers now enter into force on the first day of the new VAT tax period, but no earlier than 1 month from the date they are officially published
The Law clarifies how regulatory acts of the Russian Government will enter into force, in particular, those that approve the rules for drawing up commercial invoices (‘schet-faktura’) and maintaining the purchase and sales ledgers used when calculating VAT.
Starting from June 2, 2016, the Russian Tax Code directly stipulates that regulatory acts of the Russian Government on taxes and levies shall enter into force according to the general rules for legislative acts on taxes and levies:
- No earlier than upon expiry of 1 month from the date of the official publication and no earlier than on the first day of the next tax period for the respective tax – for regulatory acts on taxes;
- No earlier than upon expiry of 1 month from the date of the official publication – for regulatory acts on levies (see Clause 5 Article 5 of the Russian Tax Code in edition dated 02.06.2016).
3. Tax authority is entitled to request explanations on the taxpayer’s operations related to tax benefits in the course of in-house inspection
Pursuant to the Law, in the course of an in-house inspection, the tax authorities are entitled not only to request documents confirming the benefits but the taxpayer’s explanations in relation to the benefits as well.
The taxpayer must provide the explanations within 5 work days (see Clause 6 Article 88 of the Russian Tax Code in edition dated 02.06.2016).
4. Taxpayers can submit to a tax authority scans of documents
Pursuant to the Law, starting from June 2, 2016, taxpayers are entitled to provide the hardcopy documents required in the course of tax inspection, in electronic form as electronic images of the documents (i.e. document scans with retention of the document properties) in formats determined by the Federal Tax Service of the Russian Federation.
The documents can be provided through telecommunication channels or the taxpayer’s personal account on the tax authority’s web site (see Clause 2 Article 93 of the Russian Tax Code in edition dated 02.06.2016).
5. Rules clarified for sending objections regarding results of additional tax control measures
A taxpayer is entitled to provide objections to the tax authority in writing following the results of additional tax control measures within 10 days after they are completed (see Clause 6.1 Article 101 of the Russian Tax Code in edition dated 02.06.2016).
6. List of grounds expanded for the right of a higher tax authority to ignore the taxpayer’s claim
The Law establishes new grounds based on which the tax authority is to ignore the taxpayer’s claim:
- If the claim does not specify the tax authority’s unlawful acts, acts or omissions of its officials, which caused the violation of rights of the person submitting the claim, and
- If prior to a decision being adopted on a claim, the tax authority through which the claim was submitted cured the violation of the taxpayer’s rights and notified the higher tax authority (see Clause 1 Article 139.3 of the Russian Tax Code in edition dated 02.06.2016).
7. Higher tax authority is entitled to consider the claim with participation of the taxpayer
Previous edition provided consideration of the claim by the higher tax authority without participation of the taxpayer.
In accordance with the amendments in the Law, the tax authority will be entitled to engage the taxpayer when considering the claim in the following events:
- If in the course of considering the claim, discrepancies in the information provided by the lower tax authority are revealed or
- Information provided by the taxpayer differs from the information provided by the lower tax authority (see Clause 2 Article 140 of the Russian Tax Code in edition dated 02.06.2016).
II. Amendments in force from July 1, 2016
1. Provisions of the Russian Tax Code related to procedure for electronic exchange of documents between the taxpayer and tax authorities are clarified:
- A specific period is established for receiving electronic documents from the tax authority for organizations providing declarations/calculations in electronic form – 10 days from the date the obligation to provide the report in electronic form originates.
The obligation is deemed performed when a taxpayer has an agreement with an operator of electronic document workflow and a qualified certificate for verifying the digital signature, or the taxpayer’s authorized representative has such agreement and a qualified certificate for verifying the digital signature.
- The Law clarifies the powers of the taxpayer’s representative in the event of electronic exchange of documents: the representative is entitled to receive from the tax authority documents addressed to the taxpayer if the tax authority has documents confirming the representative’s powers.
The documents confirming the representative’s powers shall be submitted to the tax authority by the taxpayer in person or through the representative, or shall be sent in electronic form no later than 3 days after granting the representative the respective powers (see Clause 5.1 Article 23 of the Russian Tax Code in edition dated 01.07.2016).
2. New grounds for blocking accounts of taxpayer organizations
Starting from July 1, 2016, the tax authority is entitled to suspend operations on the taxpayer’s bank accounts, as well as the transfer of its electronic monies in the event the taxpayer organization fails to perform obligations on ensuring receipt of documents in electronic form from the tax authority via communication channels through the operator of electronic document workflow (see Sub-Clause 1 Clause 3 Article 76 of the Russian Tax Code in edition dated 01.07.2016).
III. Amendments in force from January 1, 2017
1. Organizations to provide explanations on VAT only in electronic form
Taxpayers providing the VAT tax declaration in electronic form in the course of an in-house inspection must provide explanations on request of the tax authority only in electronic form by telecommunication channels through the operator of electronic document workflow in the form established by the Federal Tax Service of the Russian Federation.
If the said explanations are provided on paper, the explanations will be deemed not provided (see Clause 3 Article 88 of the Russian Tax Code in edition dated 01.07.2017).
2. Provisions on liability for unlawful failure to inform the tax authority in accordance with Article 129.1 of the Russian Tax Code are clarified
The Law clarifies the provisions of Article 129.1 of the Russian Tax Code and establishes that in the event of failure to provide explanations or in the event of violating the timeframes for providing explanations (5 days) in relation to tax declaration/calculation in course of an in-house inspection, the taxpayer can be held liable in form of a fine in the amount up to 20,000 rubles (see Article 129.1 of the Russian Tax Code in edition dated 01.07.2017).
Should any questions arise in connection with the above or if you need any additional materials, please contact Dmitry Churin St. Petersburg Office of Capital Legal Services.
This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.