The tax authorities conduct off-site tax inspection using declarations filed by the taxpayer and other documents in their possession with respect to the calculation and payment of taxes. This procedure has its own characteristics, rules, and deadlines, knowledge of which can provide businesses with peace of mind and which can help business avoid several negative consequences.
In contrast to on-site tax inspections, which are carried out at the location of the company, off-site tax inspection occurs directly at the tax authorities' office. No notification is sent to the taxpayer.
In normal cases, inspectors may not even require additional documentation. Naturally, there are exceptions to this, such as when they are reviewing declared exemptions.
If inspectors find inconsistencies in the tax returns, they may request additional documentation. They have the right to find out information about the activities of the firm and its legal partners.
Formal request for document submissions is delivered/served to an authorized representative of the company in person or by mail or e-mail.
Additionally, inspectors may request original documents, but in the majority of cases they accept copies.
The deadline for submitting documents is 10 days from when the request is made.
In the case that it is not possible to furnish the documents by the prescribed deadline, the company should inform the tax authorities in writing within one day of the request, indicating which forms will not be submitted and explaining why an extension is needed. Then, within two days of receiving notification, the head of the tax authority has the right to either grant or refuse the request for a deadline extension.
Ignoring the requests of the inspectors or missing the deadline will result in a fine of 200 rubles for every missing document.
Off-site tax inspections should be completed not later than three months from the date the documents were submitted. However, be aware that beyond the three-month deadline, inspectors may take additional measures. In these particular measures, inspectors again have the right to demand documents from a taxpayer or persons who have relevant information, to examine witnesses, and to appoint expert examination. When reviewing a consolidated group of taxpayers, these measures should not continue for longer than one or two months.
If legal violations are not found during an off-site tax inspection, than inspectors will issue no final report. Otherwise, the auditors should issue an off-site audit report.
This report should be issued within ten working days of concluding the off-site inspection. The inspectors have five days from the date that the report was signed to deliver it to the taxpayer. Documents evidencing the legal violations are attached to the report.
After receiving the finalized report, the taxpayer has fifteen days to present written objections, if any. These objections may include the assertions and/or conclusions reflected in the report or with how the inspectors conducted the inspection. Filing objections is the right of the taxpayer; not an obligation.
After the 15-day period, inspectors will have ten days for consideration of materials and make a decision in the taxpayer's case. Confirmed violations of established procedures by inspectors may be grounds for revocation of decision of taxpayer’s legal liability. If the taxpayer does not agree with the tax inspectors' decision, they may challenge it before a judge, and if necessary, appeal to a higher tax authority.
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