The Federal Tax Service has published draft electronic forms and the formats of documents for conducting tax monitoring
Pepeliaev Group advises that a draft Order of the Russian Federal Tax Service has been posted on of draft regulations approving forms, and formats of documents, used for tax monitoring, as well as requirements for them.
The Draft Order comprises in total 27 attachments developed by the Federal Tax Service.
Please be reminded that at present the forms of documents used in monitoring are formalised by Order No. 323[1]. Moreover, in its Letter No. BV-4-23/13939@ dated 30 August 2020[2], the Federal Tax Service forwarded new recommended forms and new formats for submitting documents used in entering into and conducting tax monitoring, where taxpayers could use some of the forms instead of those in Order No. 323.
The Draft Order that has been published provides that once it is adopted, Order No. 323 is repealed. It is evident that the relevant forms and the formats of documents which are as yet only recommended by the Federal Tax Service’s Letter dated 31 August 2020 will become mandatory from that time (as amended by the new Order).
Further, the Draft Order does not deal with the forms of documents to the extent of the requirements for arranging a company’s internal control system (ICS) approved by Order No. 509[3] and recommended by the Federal Tax Service’s Letter dated 31 August 2020.
The Draft Order contains the forms of documents which were included in Order No. 323 and the Federal Tax Service’s Letter dated 31 August 2020, as well as new forms of documents.
The Draft Order provides that the scheduled plan to transfer to tax monitoring is provided with respect to a group of companies rather than a particular taxpayer (similarly to filing an application for monitoring and a road map). It will indicate the year from which the relevant group of companies is planning to enter into monitoring. The Draft Order, however, does not contain any restrictions on indicating the year in the scheduled plan when the transfer to monitoring will take place.
Once the company decides to enter into monitoring, it will develop the road map to prepare for the tax monitoring together with the tax authority. The road map contains the list of measures in the context of the transfer to tax monitoring and the timeframes for such a transfer.
The Draft Order provides that a road map must be approved by the tax authority not later than 5 business days after it is received at the tax inspectorate. Once it has considered the road map the tax authority will forward a notification approving or refusing to approve the road map.
1.2. Some of the documents that the Draft Order proposes have been drawn up based on the above draft law on improving tax monitoring.
Thus, the form of the resolution to extend the deadline of tax monitoring (Annex 24 to the Draft Order) has been drawn up based on the provisions of article 105.26(5) of the Tax Code as amended by the draft law. At present, the Tax Code does not in principle provide for an opportunity to extend the deadline for carrying out monitoring.
Similarly, the form of the notification that documents (information) have been submitted to the tax authority further to a request to collect documents (information) (Annex 25 to the Draft Law) is based on the provision of article 93.1(4.1) of the Tax Code which is included in the draft law.
The forms for the notification of the existing grounds for early termination of monitoring and of such early termination (Annexes 26-27 to the Draft Order) have been drawn up based on the provisions of clauses 1.1 and 2 of article 105.28 to the Tax Code proposed in the draft law, which imply that the tax authority should comply with early termination of monitoring (first, the company should be notified that a relevant ground exists).
In view of the above, the Draft Order proposes to approve XML- and PDF/A3 formats for documents which a company submits in connection with tax monitoring (the PDF/A3 format is being approved for the accounting policy only).
The formats in which forms of the documents should be submitted have been established in Annexes 3, 6, 10, 12, 14, 17, 19 and 21 to the Draft Order. Electronic documents will be reflected automatically and reviewed within the information system of a tax authority.
With a continuously growing number of participants in monitoring and the proposed considerable lowering of the thresholds for switching to this form of tax control, the Federal Tax Service is actively striving to make interactions with companies automated.
As stated on the portal of draft regulations, public discussions with respect to the Draft Order will be held by 23 November 2020, while the proposed deadline for the regulation to come into force is April 2021.
Based on the above deadline, it might be expected that the draft law on improving tax monitoring will be adopted in near future.
The Draft Order comprises in total 27 attachments developed by the Federal Tax Service.
Please be reminded that at present the forms of documents used in monitoring are formalised by Order No. 323[1]. Moreover, in its Letter No. BV-4-23/13939@ dated 30 August 2020[2], the Federal Tax Service forwarded new recommended forms and new formats for submitting documents used in entering into and conducting tax monitoring, where taxpayers could use some of the forms instead of those in Order No. 323.
The Draft Order that has been published provides that once it is adopted, Order No. 323 is repealed. It is evident that the relevant forms and the formats of documents which are as yet only recommended by the Federal Tax Service’s Letter dated 31 August 2020 will become mandatory from that time (as amended by the new Order).
Further, the Draft Order does not deal with the forms of documents to the extent of the requirements for arranging a company’s internal control system (ICS) approved by Order No. 509[3] and recommended by the Federal Tax Service’s Letter dated 31 August 2020.
The Draft Order contains the forms of documents which were included in Order No. 323 and the Federal Tax Service’s Letter dated 31 August 2020, as well as new forms of documents.
1. New forms of documents
1.1. The Draft Order proposes to approve:- the form of a scheduled plan to transfer to tax monitoring and the procedure to complete such form (Annexes 1-2 to the Draft Order);
- the form of a road map to prepare for the transfer to tax monitoring, the procedure for completing such form and having it approved, as well as the notification of the approval (refusal) of such road map by the tax authority (Annexes 4-5 and 7-8 to the Draft Order).
The Draft Order provides that the scheduled plan to transfer to tax monitoring is provided with respect to a group of companies rather than a particular taxpayer (similarly to filing an application for monitoring and a road map). It will indicate the year from which the relevant group of companies is planning to enter into monitoring. The Draft Order, however, does not contain any restrictions on indicating the year in the scheduled plan when the transfer to monitoring will take place.
Once the company decides to enter into monitoring, it will develop the road map to prepare for the tax monitoring together with the tax authority. The road map contains the list of measures in the context of the transfer to tax monitoring and the timeframes for such a transfer.
The Draft Order provides that a road map must be approved by the tax authority not later than 5 business days after it is received at the tax inspectorate. Once it has considered the road map the tax authority will forward a notification approving or refusing to approve the road map.
 | At present, the development of a scheduled plan or of a road map is not provided for either by current legislation or in the context of improving tax monitoring. Still, the form of a road map has been proposed in the Federal Tax Service’s Letter No. ED-4-15/8599@ dated 7 May 2019. The five milestones of the road map described in the procedure for filling in the road map (Annex 5 to the Draft Order) correspond to the milestones of the transfer to tax monitoring as set out in the Letter. The Letter, however, contains a more detailed description of the relevant milestones (the sub-milestones have been identified). In view of the above, it might also be possible to follow the Letter at hand after the new regulation comes into effect. |
1.2. Some of the documents that the Draft Order proposes have been drawn up based on the above draft law on improving tax monitoring.
Thus, the form of the resolution to extend the deadline of tax monitoring (Annex 24 to the Draft Order) has been drawn up based on the provisions of article 105.26(5) of the Tax Code as amended by the draft law. At present, the Tax Code does not in principle provide for an opportunity to extend the deadline for carrying out monitoring.
Similarly, the form of the notification that documents (information) have been submitted to the tax authority further to a request to collect documents (information) (Annex 25 to the Draft Law) is based on the provision of article 93.1(4.1) of the Tax Code which is included in the draft law.
|
Please be reminded that the draft law enables the tax authorities carrying out the monitoring, in the event that they are instructed to request the documents (information), to independently download the requested data from the system of the company that is subject to monitoring (without sending to the company a request to this effect). The tax authority should notify the company of the fact of such download.
|
The forms for the notification of the existing grounds for early termination of monitoring and of such early termination (Annexes 26-27 to the Draft Order) have been drawn up based on the provisions of clauses 1.1 and 2 of article 105.28 to the Tax Code proposed in the draft law, which imply that the tax authority should comply with early termination of monitoring (first, the company should be notified that a relevant ground exists).
2. Improved forms of documents
The remaining forms of documents in the Draft Order generally repeat the forms which were previously recommended by the Federal Tax Service’s Letter dated 31 August 2020. Consequently, if the Order is approved, these forms will pass from being recommended into the category of mandatory. This applies to the following forms:- the form of an application for tax monitoring and a notification revoking such application (Annexes 9 and 11 to the Draft Order);
- the form of an application refusing tax monitoring (Annex 13 to the Draft Order);
- the form of regulation of and requirements for information exchange (Annexes 15-16 to the Draft Order);
- the form of information about companies and individuals who directly and/or indirectly participate in the company (Annex 18 to the Draft Order);
- the form of accounting policy (Annex 20 to the Draft Order);
- the form of a resolution to conduct tax monitoring and of a refusal to conduct it (Annexes 22-23 to the Draft Order).
3. New formats of documents
As noted in , the application subsystem “Tax monitoring” of the Nalog-3 Automated Information System is to be completed by the end of 2020. It will help to make the exchange of documents fully automated between a tax authority and the participants in tax monitoring.In view of the above, the Draft Order proposes to approve XML- and PDF/A3 formats for documents which a company submits in connection with tax monitoring (the PDF/A3 format is being approved for the accounting policy only).
The formats in which forms of the documents should be submitted have been established in Annexes 3, 6, 10, 12, 14, 17, 19 and 21 to the Draft Order. Electronic documents will be reflected automatically and reviewed within the information system of a tax authority.
What to think about and what to do
The Draft Order seems to be one of many concerning tax monitoring that the Federal Tax Service is planning to adopt in future. In addition to the Draft Order, even now has been posted on the federal portal of draft regulations approving the forms and the formats of documents used for drawing up a reasoned opinion of the tax authority, as well as requirements for them. A draft order might be posted soon regarding the requirements for a company’s internal control service, as well as draft orders regulating other issues of monitoring.With a continuously growing number of participants in monitoring and the proposed considerable lowering of the thresholds for switching to this form of tax control, the Federal Tax Service is actively striving to make interactions with companies automated.
As stated on the portal of draft regulations, public discussions with respect to the Draft Order will be held by 23 November 2020, while the proposed deadline for the regulation to come into force is April 2021.
Based on the above deadline, it might be expected that the draft law on improving tax monitoring will be adopted in near future.
Help from your adviser
Pepeliaev Group's team is monitoring how the legislation is evolving. We offer assistance with a wide range of issues relating to entering into and participating in the tax monitoring, including: preparing grounds for the owners (shareholders) to enter into tax monitoring, assessing the current internal control system and preparing recommendations for how to refine it taking into account the Federal Tax Service’s requirements, preparing documents for entering into the monitoring and requests for well-grounded opinions and objections to such well-grounded opinions.[1] The Federal Tax Service’s Order No. ММВ-7-15/323@ “On approving the forms of documents used in tax monitoring and requirements for such forms” dated 21 April 2017.
[2] With its Letter No. D4-23/16001@ dated 30 September 2020, the Federal Tax Service amended some of the forms and some of the formats of the documents that were attached to the letter. The Letter was also supplemented with new Attachment 15.1 “The list of areas of identifying risks”.
[3] The Federal Tax Service’s Order No. ММВ-7-15/509@ “On approving the Requirements for organising an internal control system” dated 16 June 2017.
[2] With its Letter No. D4-23/16001@ dated 30 September 2020, the Federal Tax Service amended some of the forms and some of the formats of the documents that were attached to the letter. The Letter was also supplemented with new Attachment 15.1 “The list of areas of identifying risks”.
[3] The Federal Tax Service’s Order No. ММВ-7-15/509@ “On approving the Requirements for organising an internal control system” dated 16 June 2017.