Autumn Changes to the Tax Code
On 5.10.2016, the Government approved the draft amendments to the Tax Code developed by the Ministry of Finance (hereinafter – the Ministry of Finance). Before the document was submitted to Parliament, the Government sent it to the Presidential Reform Council. .
At the same time, in October alone, 7 bills were proposed in the Parliament proposing amendments to the Tax Code. Given the large number of bills proposing amendments, parliamentarians are waiting for a “hot” fall to discuss changes to the Tax Code.
The draft amendments to the Tax Code, the latest version of which was published on September 23, 2016. On the website of the Ministry of Finance, it proposes to introduce, inter alia, changes in the administration of taxes, excise tax, personal income tax (hereinafter – PIT), transfer pricing, value added tax (hereinafter – VAT).
According to the legal experts of the Femida law firm from the city of Kazan (see the detailed information on the website), practicing in the field of consulting services for firms and enterprises, the draft amendments to the Tax Code do contain progressive changes, which should help increase transparency and the quality of tax administration , eliminating inconsistencies, reducing pressure on the business.
Securing the influence of the Ministry of Finance on tax policy
The proposed changes regarding tax administration include, in particular, the introduction of the distribution of functions of regulatory authorities (verification work at the regional level, and tax inspectorates perform exclusively service functions), formalization at the level of the Tax Code of the taxpayer’s electronic office (which has been working in test mode for some time now) liquidation of tax police.
Changes in the administration should include a clear definition of the functions of the Ministry of Finance as the central executive body, which ensures the formation and implements the state financial policy in terms of ensuring the formation and implementation of tax and customs policies. According to the proposed changes, the functions of the Ministry of Finance include:
general management, control, monitoring and coordination of the activities of regulatory bodies;
approval of normative legal acts falling within the competence of regulatory authorities (forms of declarations, calculations, adoption of other by-laws of normative legal acts, which were previously issued by the State Fiscal Service)
ensuring the development, implementation and maintenance of information and telecommunication systems and technologies (implementation of electronic services)
generalization of the practice of applying legislation on taxation issues, development of draft normative legal acts;
providing general tax advice;
approval of procedures, rules, regulations for the functioning and administration of databases used in the work of regulatory bodies, providing other state bodies with access to information from databases.
The above functions should consolidate the subordination of the State Fiscal Service (hereinafter – the SFS) of the Ministry of Finance.
Taxpayer Electronic Account
The taxpayer’s electronic office, which has been operating in test mode for several years and whose functionality is gradually expanding, should help to improve the provision of service functions by regulatory authorities. The introduction of an electronic cabinet is unlikely to bring significant changes for large businesses, because large businesses have long enjoyed the benefits of electronic reporting. And for small businesses, the introduction of an electronic office can improve communication with regulatory authorities, given the lack of queues when submitting reports, correspondence with regulatory authorities by electronic means, the possibility of receiving reconciliations of settlements with the budget, and much more free of charge.
The draft amendments proposed by the Government provide for the delimitation of powers of regulatory authorities on the provision of tax advice (oral, written and generalized). Oral advice can be provided without restriction by all regulatory authorities. Consultations in written or electronic form are provided by regulatory authorities in the Republic of Crimea, cities of regional subordination and regions by interregional territorial bodies and the Ministry of Finance. Summarizing tax advice is provided only by the Ministry of Finance.
As now, oral consultation is virtually without legal consequences for taxpayers. But the taxpayer will use the individual tax advice provided to him in writing or electronically, can not be held liable, including financial (penalties and / or interest). It is worth noting that the taxpayer receives protection only if the consultation is provided after 01/01/2017 and is included in a single database of individual tax consultations.