Topic: Execution of notifications of the elimination of violations regarding individual income tax and social tax identified by state revenue bodies based on the results of cameral control (declaration f. 200.00).

Topic: Execution of notifications of the elimination of violations regarding individual income tax and social tax identified by state revenue bodies based on the results of cameral control (declaration f. 200.00).

If violations of tax legislation are found, the state revenue bodies in accordance with the procedure established by Article 96 of the Code of the Republic of Kazakhstan "On taxes and other obligatory payments to the budget" (Tax Code), send to the address of the taxpayer, a notification of the elimination of violations identified by the state revenue bodies based on the results of cameral control accompanied by description of detected violations.

Cameral control is a component part of the system of risk management.

Cameral control is the control conducted by the tax authorities on the basis of the study and analysis of the tax reports presented by a taxpayer (tax agent), information from authorized state bodies, as well as other documents and information  on the activities of the taxpayer

Cameral control objective is provision the taxpayer with the right to independently eliminate violations identified by the tax authorities based on the results of cameral control through registering in the tax authorities and (or) submitting tax reports in accordance with the Article 96 of the Tax Code and (or) paying taxes and payments to the budget.

Cameral control is carried out by comparing the following data available in the tax authorities:

1) tax reporting;

2) on objects of taxation and (or) objects related to taxation held by information other state bodies;

3) information on the activities of the taxpayer obtained from various sources of information;

4) other reporting established by the Tax Code.

Cameral control is conducted after electronic invoices issue and (or) for the relevant tax period after the deadline for submission of tax reporting for such period established by the Tax Code

Cameral control is carried out during the limitation period as defined under the provisions established by the Article 48 of the Tax Code.

According to the results of cameral control the following documents are issued:

- violation with a high degree of risk – a notification of the elimination of violations identified by the tax bodies based on the results of cameral control accompanied by description of detected violations and their degree of risk

- violation with an average degree of risk - a notification of the elimination of violations identified by the tax bodies based on the results of cameral control accompanied by description of detected violations and their degree of risk;

- violation with a low degree of risk - a notice of violations identified by the tax bodies based on the results of cameral control accompanied by description of detected violations and their degree of risk.

Execution of the notification on the elimination of violations identified by the tax bodies based on the results of cameral control is carried out by the taxpayer (tax agent) within 30 working days from the day following the day of its delivery (receipt).

According to paragraph 2 of Article 96 of the Tax Code, execution of the notification on the elimination of violations identified by tax bodies based on the results of cameral control is submission of one of the following documents by a taxpayer (tax agent):

- submission of tax reporting on the notification for the tax period to which the identified violations relate to, if in agreement with the identified violations;

- submission to the tax authority, explanations about the absence of violations with extracts from the registers of tax and (or) accounting and (or) documents related to the above violations, confirming the reliability of the data entered in the tax reporting, except for the cases provided for by paragraph 3 of Article 96 of the Tax Code, in case of disagreement with the violations with an average degree of risk indicated in the notification;

- complaints against actions (inaction) of officials of tax bodies on sending such a notification.

When conducting cameral control of the declaration on individual income tax and social tax, the following violations are often found:

- a tax agent (legal entity, individual entrepreneur) does not show employees in tax reporting forms (hereinafter - the TRF) 200.00 in the presence of turnover on the TRF as well as other signs of entrepreneurial activity based on other sources of information;

- income from entrepreneurial activity has been received according to the tax reporting data or the presence of employees is assumed to exist based on other data sources, but the tax agent does not show accrued income of employees, that allows for possibility of lowering of individual income tax, social tax, as well as social payments (social contributions, mandatory pension contributions, mandatory social health insurance).

Upon confirmation of violation: a taxpayer provides an additional form of tax reporting 200.00 for the period of violation. The 200.00 form reflects the number of employees. Line 200.00.001 reflects amount of individual income tax (IIT) calculated from the income of employee, as well as amount of social payments in the corresponding lines. The taxpayer also fills out Annex No. 5 to the declaration 200.05 form indicating the employees.

If the violation is not confirmed: a taxpayer provides supporting documents. Namely, a statement and order of dismissal or leave without maintenance.

It is important to note that the head of a limited liability partnership is considered an employee of this organization from the point of view of labor legislation regardless of whether he is a hired employee or owns the company. Article 140 of the Labor Code of the Republic of Kazakhstan describes in detail how the activities of the head of a legal entity are regulated. The employment contract is not concluded, but "employment is contracted by the employer's act on employment, which must contain the labor function, period of employment, start date of work, the place of work, as well as the amount and other pay conditions."

Article 104 of the Labor Code states that the amount of salary cannot be less that the statutory minimum salary established for the relevant financial year. Therefore, it is necessary to pay salary in any case, even when there is no money to pay salaries, or the activity has been suspended or they have just opened and have not yet started working.

Non-execution of the notification of the elimination of violations identified by the tax bodies based on the results of cameral control within the prescribed period entails the suspension of debit operations on the taxpayer's bank accounts in accordance with Article 118 of the Tax Code.

Failure to comply with lawful requirements of state revenue bodies and their officials entails administrative liability in accordance with Article 288 of the Code of the Republic of Kazakhstan "On administrative violations".