| The income of Russians since 2001 will be included in the database Tax audits may soon become an inevitable event for every citizen. As it became known from a source in the Federal Tax Service, by September tax officials intend to create a nationwide database of income received by citizens since 2001. Fiscal officials assure that tax authorities still have the right to control the compliance of expenses with income.
Although the procedure for tax control over large expenses has been abolished since January of this year under noisy PR support and assurances that “tax laws will become more liberal for honest citizens,” in fact, control has not disappeared anywhere. Tax officials still have the right to “collect information” about the income of citizens and have never stopped doing this. Only if today this information is quite scattered, then soon, as soon as it is summarized, tax authorities, and possibly other control authorities, will be able to analyze this information to identify suspicious manipulations with income.
The so-called “cancellation” of control over compliance with income of large expenses consisted only in the fact that three articles specifying the control mechanism were deleted from the Tax Code (TC). Articles 86.1, 86.2 and 86.3 gave tax authorities the right to control the costs of purchasing real estate, cars, shares of open joint stock companies, securities, savings certificates, as well as cultural property and gold bullion. The Code obligated organizations registering transactions, property or rights to it to submit information about the persons who made purchases to the tax authorities within 15 days.
If there was a significant discrepancy between the amounts of income and expenses, the fiscal authorities could ask a question about the origin of the money and give 60 days to fill out a special income declaration. If the citizen’s explanations did not satisfy the tax authorities, they had the right to conduct an additional inspection. If the defaulter failed to somehow resolve the dispute or pay the fine, then in the worst-case scenario, the tax non-compliance could result in a prison sentence.
In practice, the repealed articles did not significantly narrow the control powers of tax authorities. The fact is that, in fact, the three above-mentioned articles were canceled only because they contradicted other control articles of the code. Article 85.3 of the Tax Code still states that accounting and registration authorities are required to provide information about housing and cars purchased by citizens within ten days (and not even 15, as under the repealed articles) to make available to fiscal officials. The tax service, as before, receives information from the authorities for registering individuals at the place of residence and registry offices. That is, tax authorities become aware of a citizen’s move to another city, a change in his family status, and even his death almost instantly.
Tax officials retained all powers to collect data on citizens’ incomes. Article 31 of the code allows them to “determine the amount of taxes to be paid into the budget by calculation based on the information they have about the taxpayer, as well as data about other similar taxpayers.” Fiscal officials have the right to suspend transactions on taxpayers’ bank accounts and demand from the payer explanations and documents confirming the correctness of tax calculations. And finally, call as witnesses persons “who may be aware of any circumstances relevant to the conduct of tax control.”
According to lawyers, nothing prevents fiscal officials from identifying how much was spent by citizens and how much they earned. “The current version of the Tax Code (clause 10, clause 1, article 31) still provides that tax authorities have the right to control the compliance of large expenses of individuals with their income,” says Vladimir Bondarenko, an employee of the Vegas-Lex law firm. “And since the general regulation on control continues to be in force, tax authorities are trying to implement it by systematizing information from registration authorities.” Another thing is that now the tax authority no longer reveals the difference between a citizen’s income and expenses, but only the amount of income on which the tax was not paid on time. Tax authorities cannot legally “compare” the income and expenses of individuals; they can only monitor their “compliance,” the lawyer says.
The “income database,” when it appears, will have to help inspectors in verification work, the tax service says. It is possible that other structures will also use it: for example, the Ministry of Internal Affairs and the Financial Monitoring Committee. If, according to the database, it turns out that the citizen had income, the taxes on which were never received by the treasury, further developments may vary depending on how interested law enforcement agencies are in his person. Some will get off with a fine by paying the tax authorities the identified debt with a fine, while others will be prosecuted under articles of the Criminal Code. And this is either a fine from 200 to 1000 minimum wages, or, for crimes on a particularly large scale, imprisonment for a term of one to three years. Irina SKLYAROVA |
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