How to behave if the tax authorities have questions
Posted: Sun Jan 19, 2025 9:05 am
In any interaction with tax authorities, dialogue is important. It is undesirable to ignore any tax demands. An answer is always better than complete silence.
Conventionally, we can distinguish two methods of interaction with tax authorities during audits: reactive and proactive.
Reactive method
A company developing equipment for the agro-industrial china telegram database complex, receiving an IT benefit, was required to show a 70% share of IT revenue during a desk tax audit. At the same time, the company's contracts with clients indicated "equipment supply" (not eligible for benefits). Software adaptation and modification services (eligible for benefits) were not included in the documents. On paper, everything looked like the purchase and sale of equipment.
In this case, the tax authority may quite rightly see a complete absence of IT activity, cancel the IT benefit, the company’s accreditation, and charge additional income tax, insurance, and VAT.
The main mistake of the entrepreneurs was in the execution of documents that did not reflect the real IT activities of the company, which ultimately caused questions from the tax authorities and the beginning of an audit. The company brought the documents into compliance, correctly showed its IT services, and in the end everything ended with a fine of 200 thousand rubles. If this had not happened, the amount of additional taxes would have been more than 20 million rubles.
Proactive method
The software development company knew in advance about the upcoming desk audit. Without waiting for possible consequences and in order to minimize risks, the entrepreneurs conducted a check of their business to understand how the tax authorities see them from the outside.
Discrepancies in the execution of documents were revealed at the stage before the tax authorities had questions for the company. The entrepreneurs executed the documents in accordance with the requirements and passed the tax audit without any comments.
Conventionally, we can distinguish two methods of interaction with tax authorities during audits: reactive and proactive.
Reactive method
A company developing equipment for the agro-industrial china telegram database complex, receiving an IT benefit, was required to show a 70% share of IT revenue during a desk tax audit. At the same time, the company's contracts with clients indicated "equipment supply" (not eligible for benefits). Software adaptation and modification services (eligible for benefits) were not included in the documents. On paper, everything looked like the purchase and sale of equipment.
In this case, the tax authority may quite rightly see a complete absence of IT activity, cancel the IT benefit, the company’s accreditation, and charge additional income tax, insurance, and VAT.
The main mistake of the entrepreneurs was in the execution of documents that did not reflect the real IT activities of the company, which ultimately caused questions from the tax authorities and the beginning of an audit. The company brought the documents into compliance, correctly showed its IT services, and in the end everything ended with a fine of 200 thousand rubles. If this had not happened, the amount of additional taxes would have been more than 20 million rubles.
Proactive method
The software development company knew in advance about the upcoming desk audit. Without waiting for possible consequences and in order to minimize risks, the entrepreneurs conducted a check of their business to understand how the tax authorities see them from the outside.
Discrepancies in the execution of documents were revealed at the stage before the tax authorities had questions for the company. The entrepreneurs executed the documents in accordance with the requirements and passed the tax audit without any comments.