How periodic tax audits are planned based on risk assessment?

Periodic tax audits based on risk assessment criteria are audits appointed by tax bodies in relation to taxpayers (tax agents) based on the results of analysis of tax reports, information from authorized state bodies, as well as information obtained from official and open sources of information on the activities of taxpayers (tax agents).

The ground for scheduling inspections based on the risk assessment criteria will be a semi-annual schedule approved by the decision of the authorized body.

At the same time, changes to the semi-annual audit schedules are not allowed.

The semi-annual consolidated schedule of audits will be posted on the Internet resource before December 25 of the year preceding the year of audits and before May 25 of the current calendar year by the authorized body.

Depending on the nature of risk, the tax authorities apply various methods of risk assessment and tools to respond to all of them.

Categorization of taxpayers, "restriction of issuing E-invoices" within the pilot project,  formation of the results of cameral control, as well as selection of a taxpayer (tax agent) for tax audits are separate areas of applying the risk management system. (hereinafter - RMS).

Categorization is performed by classifying the activities of taxpayers (tax agents) to one of three degrees of risk: low, medium or high in accordance with Article 136 of the Tax Code and the rules for applying the Risk Management System according to criteria which are not confidential information, regulated by Order No. 252 of the Minister of Finance of the Republic of Kazakhstan dated February 20, 2018 (hereinafter – the Rules).

Depending on the assigned degree of risk based on the results of categorization, the following tax administration measures related to the taxpayer's tax obligations are differentiated:

1) termination of the activities of certain categories of individual enterpreneurs in a simplified manner;

2) filing a tax application for VAT registration;

3) extension, suspension of tax reporting;

4) ensuring the fulfillment of a tax obligation t not performed by the due date;

5) enforced collection of tax arrears.

Categorization is performed by analyzing tax reporting data provided by taxpayers, as well as other information on  activities of taxpayers.

The risk assessment criteria for selection for tax audit is carried out in an automated mode at the central level.

According to the indicators of the degree of risk, the subject (object) of the tax audit belongs to one of two degrees of risk: high ( if an indicator of the probability is above 51%) or not high (if an indicator of the probability is 51% and less).

Thus, the degree of risk based on the results of the general categorization of taxpayers (under Article 136 of the Tax Code) and the degree of risk based on the results of the selection for the tax audit are not identical, because they are used in various fields of administration, they have a different statutory legal basis and  different  indicators for the selection.