The state revenue bodies study and analyze the reports submitted by the taxpayer on an ongoing basis, and in case of detecting deviations, an opportunity is provided to independently eliminate violations by sending notifications/cameral control notices.
The most common violations are of the following nature:
- Understatement of income in comparison with the data of electronic invoices (hereinafter - the e-invoice) (sales turnover) and cash register machines (hereinafter - the CRM);
- Padding deductions in comparison with the acquisition e-invoice;
The main reason to underestimate income is not breaking checks. In order to avoid such violations, it is necessary to observe fiscal discipline, automate accounting, and regularly review compliance of the e-invoice and CRM data.
For taxpayers is important to maintain transparency in conducting business, correctly capture revenue, and use modern tax control methods to avoid problems and ensure the stable development of their company.
Padding deductions in comparison with the e-invoice is a common mistake that can lead to tax risks. This situation occurs when a taxpayer claims expenses for deduction, exceeding the actual cost of the purchased goods, works or services, confirmed in the e-invoice.
The Tax Code provides for a list of exspenses required for corporate income tax deductions (hereinafter- the CIT. However, despite the established rules, some taxpayers resort to various methods to avoid paying taxes, including transferring expenses from one category to another or reflecting incorrect deductions.
Another reason is the late adjustment to the data. For example, in the case of corrections in the e-invoice or return of part of the goods, the deduction amount must also be reviewed, but not taking into consideration of these changes in accounting, may cause some discrepancies with the declaration.
In order to avoid such discrepancies, it is necessary to introduce a strict monitoring of compliance of accounting data and information from the e-invoice. Regular reconciliations shall help to identify discrepancies even before submitting reports.
Thus, control, automation and a competent approach to tax accounting shall help to avoid mistakes related to padding CIT deductions and reduce the risks of tax surcharges.