Tax NewsFlash - October 2022

Dear Readers,

An order¹ of the Minister of Finance introduced amendments to the procedure for the application of the risk management system for publicly open criteria. We offer you a brief overview of the amendments.

Risk Assessment Procedure

• The amendments changed the date for a regular revision of information on the risk degree. Taxpayers will be categorized on the first day of the second month (previously the third month) preceding the reporting half-year period;
• The amendments set a one-day deadline for the tax authorities to introduce amendments to a taxpayer’s risk assessment calculations upon a receipt of the reasonable explanations from the taxpayer on the criteria and indicators used in the calculations;
  
• The amendments excluded the provision on the risk degree reduction upon the payment of taxes or other obligatory payments in the amount exceeding the established threshold.

Criteria

• The criterion Repeated Amendments to the Previously Submitted Tax Declaration was replaced by a new criterion Taxpayers with Signs of Tax Evasion by Reducing Tax Liabilities on Amended Declarations. The new criterion is applied if a taxpayer submits an amended tax declaration to reduce corporate income tax and (or) value added tax liabilities upon the execution of a desktop review notice. The priority of this risk-increasing criterion is plus five points.
• The amendments excluded the criterion Use of a Cash Register Equipped with the Data Registration and (or) Transfer Function positively influencing the degree of risk.
• The order introduced the following two new criteria negatively affecting the degree of risk:
  • Failure to submit tax reports within the established deadlines – plus four points;
  • A taxpayer is on the list of unreliable taxpayers – plus five points.

The order entered into force on 23 September 2022.