“My goal is precisely to tell you what work needs to be done in the company to eliminate risks during tax audits,” said Elena Zhuger, chairman of the Association of Auditing Organizations and director of the BelAuditalians audit company, at the Tax Day conference. The expert explained the logic of checks and gave useful checklists for managers and accountants. Details are in the article “About business”.
GENERAL PARTNER OF THE CONFERENCE
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Pros and cons of desk audits
– The most important thing that business should understand today is that the tax department has become a digital agency. The electronic declaration system, created in 2017, works very efficiently. And, in fact, the tax inspectorate sees all the information about the company’s activities remotely. This digital transformation is getting stronger every year. I think that in 5 years the tax authorities will be able to recalculate not only the value added tax, which they have been monitoring since 2017, but also the income tax. And the department will do it online.
The main checks are already being carried out online: cameral control has become the main form of control. And the tax authorities can now cover a larger number of payers than during scheduled and on-site inspections. In 2022, all planned tax audits were canceled altogether.
What is the difference between an unscheduled inspection and a scheduled one? An unscheduled audit is carried out if the tax inspectorate already has certain information about the violation – on the basis of an order from the head of the tax inspectorate.And there were many such checks last year.
They proceed to the stage of an unscheduled inspection in a situation where, within the framework of an in-house audit, violations cannot be substantiated, but there are already suspicions. And here, oddly enough, there are positive aspects for those who are checked, because the main purpose of these checks is to prevent violations, and not to punish them.
But there is also a significant disadvantage of cameral control: checks are carried out not for the current, but for past periods. The review period is currently limited to five years.
There is one more unresolved issue of cameral control. Nowhere is it clearly fixed how much documentation can be required from the person being checked within the framework of cameral control. This is a problem when in some cases all documentation is required. An order within the framework of cameral control is not issued, but documentation may be required.
Stages of inspections
The tax code mentions only two stages of tax audit within the framework of cameral control – this is preliminary and subsequent. But there is always an analysis stage, when the tax inspectorate examines the activities of business entities, requests information from the Unified State Register, from customs authorities and other sources. This also includes data on salaries, payments to the Social Security Fund, and so on. Tax inspectors have access to any information, so this stage is fast, but it is very important.
Here is the complete structure of the desk audit:
I want to warn you: in many cases, the tax inspectorate does not see your real business conditions at all and does not understand what you are doing, what are your nuances, features, and so on. Therefore, it is necessary to give explanations on the requested information correctly.
I will give an example from my practice.
The subpayer received a notification to provide an explanation on the issue that for all business entities he sells goods for 1000 rubles, and in a particular transaction this product was sold for 500 rubles. The tax inspectorate does not see the terms of the transaction, it does not see the terms of the contract.
In fact, there was such a situation: the product was expired, and it was more profitable to sell it at half price than not to sell it. That is, we saved on the disposal of goods and so on. After detailed explanations were given to the tax inspectorate, primary documentation, contracts, acts, business correspondence with the counterparty were presented, information on expiration dates was provided – and then all questions would be removed.
Features of conducting inspections: how and what to be prepared for
Tax audits in recent years are not at all what they used to be. Today they are based on completely new ways and methods of work. This includes surveys of any employees of the company, your contractors, customers, and so on. Business correspondence is studied, including in instant messengers, chats, and so on. Therefore, it is necessary that you be ready for any questions.
Checklist for preparing for the audit for the owner and director:
1. Inventory of assets and liabilities
Practice shows that inventory is one of the most effective ways to identify errors. Conduct an inventory of property at all facilities where it is stored. Check its actual availability with accounting data. Remember that many inspections begin with an inventory of warehouses, retail outlets, and manufacturing facilities.
Conduct reconciliation of settlements with counterparties. If there are discrepancies in the calculations, specify their reasons and reflect them in accounting and tax accounting. At the same time, warn your counterparties that a check is coming to you, let them be ready for counter checks.
2. Internal revision of documentation.
The head of the organization is responsible for the organization of accounting. According to paragraph. Art. 7 of the Law “On Accounting and Reporting”, the head of the organization is obliged:
– organize accounting and reporting, as well as create the necessary conditions for this;
– organize the storage of primary accounting documents, accounting registers, reporting.
Thus, the director is ultimately responsible for the submission of documentation and accounting data to the inspectors.
Check the availability of all primary documents confirming receipts and expenditures. If something is not formalized or signed, fix it. If the document is lost, there is time to restore it. And if it turns out that there is an operation in the accounting, but there are no documents, then perhaps the situation should be analyzed, the reasons found out and, if necessary, changes should be made to accounting and tax accounting.
Answer the question: do all documents relate to the activities of your organization? If you have a group of companies, make sure that the documentation of the audited company is not mixed with the documents of other companies, if the audit is on your territory, then the documentation of other companies is not stored in the accounting department.
And if there was a change of the chief accountant in the period under review, check whether the electronic copy of the program in which the records were kept was preserved, whether the registers were printed. If the accounting was carried out manually, have the book, journals and statements for accounting for the main indicators, on the basis of which revenue and costs are collected, the book of purchases and other documents, been preserved.
3. Organization of a workplace for the inspector.
During an on-site inspection, determine the workplace for the inspector. It is desirable that it be a separate office, equipped with only the most necessary. This is a table, chair, shelving for folders.
In the absence of a separate office, you can consider organizing a workplace in the room together with other employees, preferably accounting. At the same time, appoint a responsible person who will work directly with the inspector.
4. Staff briefing.
When conducting tax audits, different methods are used. One of them, quite effective, is the survey method. Prior to the start of the audit, a conversation should be held with employees of the enterprise who may fall into the circle of interviewed persons. As a rule, these can be financially responsible persons, warehouse workers, drivers delivering goods, etc. Focus the attention of all employees on the fact that they must answer questions directly related to their terms of reference. The best option would be if you make a memo for employees with an algorithm of actions during the check.
5. Invite auditors.
Preparation for tax audit — tax audit. This is the same as a tax audit, only in this case, the auditors are protecting your interests. The main attention during the tax audit is paid to checking the correctness of the calculation and timeliness of paying taxes to the budget, the organization’s expense accounts are reviewed, the validity of the use of benefits is checked, interactions with non-residents of the Republic of Belarus are checked, attention is paid to those issues that are primarily paid attention to by inspectors.
Benefits of a tax audit: third-party critical view of the situation; liability insurance – if violations are revealed during a tax audit, the insurance company pays fines and penalties.
6. Prepare for the unexpected.
It is necessary to prepare for the tax audit from the financial side. Make payments for goods, rent and other urgent needs ahead of schedule. Or create a reserve fund in case of unforeseen situations.
Checklist for preparing for the audit for the chief accountant:
Self-calculation of taxes.
As a rule, the main violations are committed by enterprises when calculating value added tax and income tax. Therefore, they should be given special attention.
– Value added tax.
Recalculate the tax base. Check the availability of primary documents confirming the validity of applying VAT rates. Check accounting and tax records for consistency. If there are discrepancies, find out their reasons. Keep in mind that you will still have to do this during the check.Conduct an audit of VAT deductions. This is especially important for organizations that have benefits or organizations that apply different VAT rates. In addition to primary documents, it is necessary to once again check the distribution of tax deductions, verify arithmetic, accounting data with tax returns.
Pay attention to the fact that the procedure for distributing VAT deductions applied by the enterprise is prescribed in the accounting policy.
– Income tax.
In preparation for the audit, analyze whether all the amounts included in the costs are documented, whether the primary accounting documents are properly drawn up, whether they are of a production nature. Make a reconciliation of mutual settlements with the tax office in the context of accrued and paid taxes, check the in-house VAT control. If the accounting data does not match the data of the tax office, find out the reasons and make changes to the accounting.
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