Tax Monitoring
What is Tax Monitoring
Tax monitoring is a modern form of tax control, which implies direct exchange of information by tax authorities with businesses through the integration into corporate information systems of taxpayers.
Benefits of switching to Tax Monitoring:
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Elimination of office and field audits
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Reduced timing of tax control
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Reduced time, financial, and labor costs for tax administration
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Obtaining a substantiated formal opinion on completed or anticipated transactions
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Minimization of tax risks
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Elimination of fines or penalties
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Decrease in the number of court cases on tax disputes
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Confirmation of the good standing status of a bona fide taxpayer
Criteria for joining the tax monitoring system
The following conditions must be met simultaneously:
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The total amount of taxes (VAT, excise taxes, income tax, MET) - at least 300 million rubles
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Annual income - at least 3 billion rubles
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The total value of assets - at least 3 billion rubles
** Calculations are made according to the data of the calendar year preceding the year, in which the application for Tax Monitoring is submitted
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Availability of an internal (tax) control system (ICS)
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Availability of the information exchange setup between the company and the tax authorities
Documentation required for joining the tax monitoring system
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Application for tax monitoring
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Regulations on the exchange of information
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Documents regulating the internal (tax) control system
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Accounting policy for tax purposes of the organization
Key entry dates and dates of conducting the procedure
Diagnostics of the current state of the company for compliance with the requirements for participation in the tax monitoring system (1 - 2 weeks)
Development / optimization of the internal (tax) control system (3 - 5 months)
Preparation / improvement of business processes of information exchange with the tax authorities
Preparation of a complete set of documents for a taxpayer to enter Tax Monitoring before July 1 of the year preceding the year of tax monitoring (2 months)
Review of the received documents by the tax authorities and making a decision on whether to proceed or refuse (3 months)
Conducting tax monitoring (1 year), the issuance of a substantiated opinion by the tax authority (no later than December 1 of the year following the period, for which tax monitoring was carried out) on the correctness of calculation (withholding), completeness and timeliness of payment (transfer) of taxes, fees, insurance premiums
Diagnostics of the current state of the company for the transition to the Tax Monitoring mode
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Assessing the degree of readiness for participation and preparation of appropriate measures
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Developing methodological recommendations for compliance with the requirements for joining the system
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Summarizing the identified tax risks and conducting analysis of IOC
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Preparing a roadmap and coordinating it with the tax authorities
Development and optimization of the internal (tax) control system and the tax risk system
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Assessment of the internal tax control system and its effectiveness
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Methodological support for system’s implementation
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Designing the structure of control procedures and disclosure of tax reporting data
Designing and improving business processes of the information exchange with the tax authorities
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Analysis and description of IT systems
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Selection of a technological platform for information exchange (remote access to the accounting system, “Data Showcase”; telecommunication systems)
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Implementation and methodological support
Preparation of a complete package of documents for the tax monitoring system
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Development of regulations on information exchange with the tax authorities
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Preparation of documents regulating the internal tax control system
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Support of the filing process and control
