B-15 RIGHTS AND OBLIGATIONS OF TAX AUTHORITIES (ART. 31, 32 of the Tax Code of the Russian Federation)

Structure and tasks of tax authorities

In the Russian Federation, tax authorities include the Federal Tax Service (FTS) and its divisions in the regions. The authorities are vested with broad powers in the field of taxation.

The function of the Federal Tax Service is to generate the revenue side of the state budget. This is achieved by:

• monitoring compliance with the provisions of legislation on fees and taxes;
• checking the correctness of accrued taxes and their timely payment to the budget;
• registration and control of the activities of tax subjects;
• checking the authenticity of accounting documents.

Tax authorities have the right to transfer materials on facts of violation to the Ministry of Internal Affairs, if criminal liability is provided for these violations, and also to file lawsuits in court.

The system of tax authorities is unified and centralized. There are 3 levels in the hierarchy:

• federal;
• regional;
• local.

The main official is the tax inspector. His duty is to monitor compliance with laws in the field of calculation and payment of taxes.

Legal status of tax authorities

According to paragraph 1 of Art. 30 of the Tax Code of the Russian Federation, tax authorities constitute a single centralized system of control over compliance with legislation on taxes and fees, over the correctness of calculation, completeness and timeliness of payment (transfer) of taxes and fees to the budget system of the Russian Federation, over the correctness of calculation, completeness and timeliness of payment (transfer) to the budget system of the Russian Federation of other obligatory payments.
This system includes

• federal executive body authorized for control and supervision in the field of taxes and fees, and
• its territorial bodies.

Currently, this is the Federal Tax Service (FTS of Russia) and its territorial bodies (Resolution of the Government of the Russian Federation “On approval of the Regulations on the Federal Tax Service” dated September 30, 2004 No. 506).

The main tasks of the Federal Tax Service of Russia are the implementation of control and supervision functions:

1. for compliance with the legislation of the Russian Federation on taxes and fees;
2. for the correctness of calculation, completeness and timely payment of taxes and fees to the relevant budget in cases provided for by the legislation of the Russian Federation, other obligatory payments;
3. over the production and circulation of ethyl alcohol, alcohol-containing, alcoholic and tobacco products;
4. for compliance with the currency legislation of the Russian Federation within the competence of the tax authorities.

The Federal Tax Service of Russia is the authorized federal executive body,

• carrying out state registration of legal entities, individuals as individual entrepreneurs and peasant (farm) households, as well as
• providing representation in bankruptcy cases and bankruptcy procedures of demands for payment of obligatory payments and demands of the Russian Federation for monetary obligations.

The Federal Tax Service of Russia is under the jurisdiction of the Ministry of Finance of the Russian Federation and is guided in its activities by the Constitution of the Russian Federation, federal constitutional laws, federal laws, acts of the President of the Russian Federation and the Government of the Russian Federation, international treaties of the Russian Federation, regulatory legal acts of the Ministry of Finance of Russia, as well as the Regulations on the Federal Tax Service. Fundamental issues of the legal status of tax authorities are established by the Tax Code of the Russian Federation, the Law of the Russian Federation “On Tax Authorities of the Russian Federation” dated March 21, 1991 No. 943-1, the Federal Law “On Currency Regulation and Currency Control” dated December 10, 2003 No. 173-FZ , as well as other regulatory legal acts.

In the event of conflicts in the legal regulation of the status of tax authorities, the norms of the Tax Code of the Russian Federation take precedence.

According to the provisions of the Constitution of the Russian Federation (Articles 72 and 76) and the Tax Code of the Russian Federation (Articles 1, 6, 12, 14, 15, 17), subjects of the Russian Federation and local governments have the right to adopt normative legal acts that are part of the legislation on taxes and fees . Elements of the legal status of a unified system of tax authorities, established by regional and municipal acts, are subject to implementation by the relevant territorial divisions of the Federal Tax Service of Russia, but according to Art. 3 of the Law of the Russian Federation “On the tax authorities of the Russian Federation” only if regional rule-makers comply with two conditions:

• regulatory legal acts at the territorial level must comply with the Constitution of the Russian Federation and federal legislation;
• they must contain regulations on taxes and fees.

Thus, regional and municipal regulatory legal acts are subject to execution by the Federal Tax Service of Russia exclusively in terms of granting rights and imposing duties in the tax sphere. Issues of other types of control carried out by tax authorities are regulated at the federal level.

Article 2 of the Law of the Russian Federation “On the Tax Authorities of the Russian Federation” establishes unity, centralization and hierarchy of structure as the fundamental principles of the organization of tax authorities. The Federal Tax Service of Russia carries out its activities directly and through its territorial bodies in interaction with other federal executive authorities, executive authorities of constituent entities of the Russian Federation, local governments and state extra-budgetary funds, public associations and other organizations.

Structure of territorial bodies of the Federal Tax Service of Russia (

):

1) the central office of the Federal Tax Service of Russia;

2) departments of the Federal Tax Service for the constituent entities of the Russian Federation;

3) inspection of the Federal Tax Service in the subjects:

• interdistrict inspection;
• inspections by district
• inspections for cities without district division;
• inspections by district in cities.

Interregional inspections of the Federal Tax Service of Russia , the formation of which is based on the principles of territoriality or certainty of the scope of activity:

• by federal districts;
• on operational control of problem taxpayers;
• on control over taxation of small businesses and services;
• on control of alcohol and tobacco products, etc.

Powers of tax authorities

Tax authorities have broad powers. Inspectors can:

• check documentation on paper and electronic media related to the calculation and payment of tax payments;
• control the procedure for using cash register equipment when making payments with payment cards or cash;
• receive various documents related to the economic activities of a company or entrepreneur;
• appoint and carry out tax audits – on-site and desk-based;
• conduct counter audits, that is, demand documents from persons with whom the taxpayer in relation to whom the audit has been ordered is associated;
• involve witnesses, experts and translators to carry out inspections;
• inspect the territory of the enterprise and premises in which documents may be located;
• seize accounting documentation provided that there is a threat of its destruction or adjustments to the papers;
• seize documentation related to concealment of additional sources of income subject to taxation;
• calculate taxes by calculation if the taxpayer does not keep records, maintains them with serious violations, or does not provide the documentation necessary for tax calculation for more than two months;
• demand that entrepreneurs, owners and management of the enterprise comply with the requirements of the Tax Code and eliminate identified violations;
• seize the taxpayer's accounts;
• impose restrictions on the taxpayer’s right to dispose of his property;
• call the management of the company or citizens to provide explanations on tax issues;
• question as witnesses citizens who have information necessary to control the calculation and payment of taxes by the taxpayer;
• assess fines and penalties when violations are detected;
• make decisions on bringing to responsibility for violations in the area of ​​tax assessment.

Tax authorities have the right to bring claims to the arbitration court for the following reasons:

• liquidation of enterprises;
• invalidation of enterprise registration;
• recognition of completed commercial transactions as invalid;
• recovery of unjustifiably received income.

When exercising their powers, tax authorities are obliged to strictly comply with the legislation on taxes and fees. The responsibilities of inspectors include conducting explanatory work and freely informing taxpayers about current regulations and their changes, as well as providing reporting forms and consulting on their completion.

Deadlines for fulfilling requirements for payment of taxes (fees)

The taxpayer receives a demand for tax payment 2 months before the final repayment date. So, if during this time the payer has not paid the debt in full, then the tax authorities have the right to speak of a violation of the legislation on taxes and fees.

The signs of a crime make it possible to assign appropriate penalties and fines to the guilty person at the rates and in the amount established by the Tax Code of the Russian Federation and other legislative acts.

The Russian tax authorities are required to submit documents to the investigator who is authorized to conduct investigations in this category of criminal cases within 10 days after identifying a violation. Most often, cases are initiated under Articles 198-199 of the Criminal Code of Russia.

Thus, the duties of a tax official are fixed by the norms of tax legislation. At the same time, responsibility for fulfilling duties is regulated by Article 32 of the Tax Code of the Russian Federation.

Failure to pay taxes entails criminal prosecution and payment of fines and penalties established by the Tax Code of the Russian Federation as of the date of violation.

New draft Federal Law

On January 30, 2020, the Ministry of Justice of Russia presented a new draft of the Federal Law “Code of the Russian Federation on Administrative Offences”.

Article 44.13 is devoted to the powers of the Federal Tax Service. In this article, representatives of the Federal Tax Service receive the right to draw up protocols on administrative offenses, which are provided for in the articles:

• 23.1;
• 23.8;
• 23.9;
• parts 2-4 of Article 23.10;
• 29.20-29.26;
• 29.28-29.30.

The Federal Tax Service of Russia considers cases of administrative offenses provided for in Articles 23.4, 29.31, 29.32, 35.11 (34.11) of this Code.

Misconduct and Abuse

The Resolution of the Constitutional Court of the Russian Federation of July 16, 2004 No. 14-P formulates a ban on unlawful actions that exceed authority. This document states that if, when carrying out control measures, tax inspectors are guided by principles that are contrary to the rule of law, then their actions turn into an instrument of counteracting freedom of enterprise.

The following are considered unlawful:

• abuse of power by officials representing tax authorities;
• procedural violations during the collection of evidence;
• use of powers for purposes contrary to the law and interests of citizens.

Failure of a tax authority official to comply with job descriptions entails liability provided for by federal law (Article 22 of the Tax Code of the Russian Federation, clause 2). Responsibility is enshrined in Art. 330 of the Criminal Code of the Russian Federation “Arbitrariness”. If signs of personal selfish interest are found in the actions of an official, he may be held accountable under Article 285 of the Criminal Code of the Russian Federation.

Tax Code of the Russian Federation. Chapter 5

1. Tax authorities have the right:

1) demand, in accordance with the legislation on taxes and fees, from the taxpayer, fee payer or tax agent documents in the forms established by state bodies and local governments, serving as the basis for the calculation and payment (withholding and transfer) of taxes, fees, as well as documents, confirming the correctness of calculation and timely payment (withholding and transfer) of taxes and fees;

2) conduct tax audits in the manner established by this Code;

3) seize documents from a taxpayer, fee payer or tax agent during tax audits in cases where there are reasonable grounds to believe that these documents will be destroyed, hidden, altered or replaced;

4) to summon, on the basis of a written notification to the tax authorities, taxpayers, fee payers or tax agents to give explanations in connection with their payment (withholding and transfer) of taxes and fees or in connection with a tax audit, as well as in other cases related to their execution legislation on taxes and fees;

5) suspend transactions on the accounts of a taxpayer, fee payer or tax agent in banks and seize the property of a taxpayer, fee payer or tax agent in the manner prescribed by this Code;

6) in the manner prescribed by Article 92 of this Code, inspect any production, warehouse, trading and other premises and territories used by the taxpayer to generate income or related to the maintenance of taxable objects, regardless of their location, and conduct an inventory of property owned by the taxpayer. The procedure for conducting an inventory of a taxpayer's property during a tax audit is approved by the Ministry of Finance of the Russian Federation;

7) determine the amount of taxes payable by taxpayers to the budget system of the Russian Federation, by calculation based on the information they have about the taxpayer, as well as data on other similar taxpayers in cases of refusal of the taxpayer to allow officials of the tax authority to inspect production, warehouse, trade and other premises and territories used by the taxpayer to generate income or related to the maintenance of taxable objects, failure to submit to the tax authority for more than two months the documents necessary for the calculation of taxes, failure to record income and expenses, record objects of taxation or maintain records in violation of the established procedure, which led to inability to calculate taxes;

demand from taxpayers, fee payers, tax agents, and their representatives to eliminate identified violations of the legislation on taxes and fees and monitor compliance with these requirements;

9) collect arrears, as well as penalties and fines in the manner established by this Code;

10) demand from banks documents confirming the fact of debiting the amounts of taxes, fees, penalties and fines from the accounts of the taxpayer, fee payer or tax agent and from the correspondent accounts of banks and transferring these amounts to the budget system of the Russian Federation;

11) attract specialists, experts and translators to conduct tax control;

12) call as witnesses persons who may be aware of any circumstances relevant to the conduct of tax control;

13) submit petitions for cancellation or suspension of licenses issued to legal entities and individuals for the right to carry out certain types of activities;

14) bring claims to courts of general jurisdiction or arbitration courts:

on the collection of arrears, penalties and fines for tax offenses in cases provided for by this Code;

on compensation for damage caused to the state and (or) municipality as a result of unlawful actions of the bank to write off funds from the taxpayer’s account after receiving a decision from the tax authority to suspend operations, as a result of which it became impossible for the tax authority to collect arrears, debts on penalties, fines from the taxpayer in in the manner prescribed by this Code;

on early termination of the investment tax credit agreement;

in other cases provided for by this Code.

2. Tax authorities also exercise other rights provided for by this Code.

3. Higher tax authorities have the right to cancel and change decisions of lower tax authorities in the event of non-compliance of these decisions with the legislation on taxes and fees.

Federal Law No. 268-FZ of December 30, 2006 supplemented Article 31 of this Code with paragraph 4, which comes into force after one month from the date of official publication of the said Federal Law

4. The forms of documents provided for by this Code that are used by tax authorities when exercising their powers in relations regulated by the legislation on taxes and fees, as well as the procedure for filling them out, are approved by the federal executive body authorized for control and supervision in the field of taxes and fees, unless otherwise the procedure for their approval is not provided for by this Code.

Federal Law of July 27, 2006 N 137-FZ Article 32 of this Code is set out in a new wording, which comes into force on January 1, 2007.

1. Tax authorities are obliged:

1) comply with the legislation on taxes and fees;

2) monitor compliance with the legislation on taxes and fees, as well as regulatory legal acts adopted in accordance with it;

3) keep records of organizations and individuals in accordance with the established procedure;

4) inform free of charge (including in writing) taxpayers, payers of fees and tax agents about current taxes and fees, legislation on taxes and fees and normative legal acts adopted in accordance with it, the procedure for calculating and paying taxes and fees, rights and the responsibilities of taxpayers, fee payers and tax agents, the powers of tax authorities and their officials, as well as submit tax return (calculation) forms and explain the procedure for filling them out;

5) be guided by written explanations of the Ministry of Finance of the Russian Federation on the application of the legislation of the Russian Federation on taxes and fees;

6) inform taxpayers, payers of fees and tax agents when registering them with the tax authorities information about the details of the relevant accounts of the Federal Treasury, as well as in the manner determined by the federal executive body authorized for control and supervision in the field of taxes and fees, inform taxpayers, fee payers and tax agents, information about changes in the details of these accounts and other information necessary to fill out orders for the transfer of taxes, fees, penalties and fines to the budget system of the Russian Federation;

7) make decisions on the return to the taxpayer, fee payer or tax agent of amounts of overpaid or overcharged taxes, fees, penalties and fines, send instructions issued on the basis of these decisions to the relevant territorial bodies of the Federal Treasury for execution and offset the amounts overpaid or overcharged taxes, fees, penalties and fines in the manner prescribed by this Code;

observe tax secrecy and ensure its preservation;

9) send to the taxpayer, payer of the fee or tax agent copies of the tax audit report and the decision of the tax authority, as well as in cases provided for by this Code, a tax notice and (or) a requirement to pay taxes and fees;

10) provide the taxpayer, fee payer or tax agent, at his request, with certificates about the status of the specified person’s payments for taxes, fees, penalties and fines based on data from the tax authority.

The requested certificate is submitted within five days from the date the tax authority receives the corresponding written request from the taxpayer, fee payer or tax agent;

11) at the request of a taxpayer, fee payer or tax agent, carry out a joint reconciliation of the amounts of taxes, fees, penalties and fines paid;

12) at the request of a taxpayer, fee payer or tax agent, issue copies of decisions taken by the tax authority in relation to this taxpayer, fee payer or tax agent.

2. Tax authorities also bear other responsibilities provided for by this Code and other federal laws.

3. If, within two months from the date of expiration of the deadline for fulfilling the requirement to pay a tax (fee), the taxpayer (payer of the fee) has not fully repaid the arrears specified in this requirement, the size of which allows us to assume the fact of a violation of the legislation on taxes and fees, containing elements of a crime, tax authorities are obliged to send materials to the internal affairs bodies within 10 days from the date of discovery of these circumstances to resolve the issue of initiating a criminal case.

Instructions on the procedure for sending materials by tax authorities to internal affairs bodies when identifying circumstances that suggest a violation of the legislation on taxes and fees containing signs of a crime, approved by order of the Ministry of Internal Affairs of the Russian Federation and the Ministry of Taxes of the Russian Federation dated January 22, 2004 N 76/AS-3 -06/37

Federal Law No. 137-FZ of July 27, 2006 introduced amendments to Article 33 of this Code, which come into force on January 1, 2007.

Tax officials are obliged to:

1) act in strict accordance with this Code and other federal laws;

2) implement, within their competence, the rights and obligations of tax authorities;

3) treat taxpayers, their representatives and other participants in relations regulated by the legislation on taxes and fees correctly and carefully, and not humiliate their honor and dignity.

Federal Law No. 95-FZ of July 29, 2004 introduced amendments to Article 34 of this Code, which come into force on January 1, 2005.

1. Customs authorities enjoy the rights and bear the responsibilities of tax authorities to collect taxes when moving goods across the customs border of the Russian Federation in accordance with the customs legislation of the Russian Federation, this Code, other federal laws on taxes, as well as other federal laws.

2. Officials of customs authorities bear the duties provided for in Article 33 of this Code, as well as other duties in accordance with the customs legislation of the Russian Federation.

3. Invalid as of January 1, 2005.

Article 34.1. Lost power. Federal Law No. 137-FZ of July 27, 2006 introduced amendments to Article 34.2 of this Code, which come into force on January 1, 2007.

1. The Ministry of Finance of the Russian Federation provides written explanations to taxpayers, payers of fees and tax agents on the application of the legislation of the Russian Federation on taxes and fees, approves tax calculation forms and tax return forms mandatory for taxpayers, tax agents, as well as the procedure for filling them out.

2. The financial authorities of the constituent entities of the Russian Federation and municipalities provide written explanations to taxpayers and tax agents on the application, respectively, of the legislation of the constituent entities of the Russian Federation on taxes and fees and the regulatory legal acts of municipalities on local taxes and fees.

3. The Ministry of Finance of the Russian Federation, financial authorities of the constituent entities of the Russian Federation and municipalities provide written explanations within their competence within two months from the date of receipt of the relevant request. By decision of the head (deputy head) of the relevant financial body, this period may be extended, but not more than by one month.

Federal Law No. 58-FZ of June 29, 2004 introduced amendments to Article 35 of this Code, which come into force after one month from the date of official publication of the said Federal Law.

Federal Law No. 137-FZ of July 27, 2006 introduced amendments to paragraph 1 of Article 35 of this Code, which come into force on January 1, 2007.

1. Tax and customs authorities are responsible for losses caused to taxpayers, fee payers and tax agents as a result of their unlawful actions (decisions) or inaction, as well as unlawful actions (decisions) or inaction of officials and other employees of these bodies in the performance of their official duties .

Losses caused to taxpayers, fee payers and tax agents are compensated from the federal budget in the manner prescribed by this Code and other federal laws.

2. Lost power.

3. For unlawful actions or inaction, officials and other employees of the bodies specified in paragraph 1 of this article are liable in accordance with the legislation of the Russian Federation.

What to do if tax authorities exceed their powers

If, during an inspection or other professional activity, an inspector violates the boundaries of the law, then the entrepreneur or company representatives can protect their rights. Violations of the law must be combated; competent legal advice can help with this.

Actions and decisions that go beyond the law can be appealed to a higher authority or in court. The chances of winning your case are much higher if you take legal help. Timely contact with a lawyer is the main factor in the successful completion of the case.

Illegal actions are recorded during the inspection process, so it is recommended to call a lawyer before it begins. Tax inspectors working under the supervision of a lawyer will behave more carefully.

Inspectors can begin an inspection only after presenting a resolution and service certificates (Article 91 of the Tax Code of the Russian Federation). Presentation of identification documents alone is not grounds for an inspection.

The resolution to conduct an inspection must indicate its purpose and indicate the range of issues to be controlled. If an inspection is assigned for VAT, then inspectors do not have the right to demand access to documents not related to this tax.

Inspectors cannot inspect premises that are not related to the taxpayer’s business activities. And the seizure of documents is carried out only in the presence of uninterested witnesses.

Instructions “How to behave during a search” from our lawyers

Evidence that inspectors obtained in violation of regulations during an inspection cannot be presented in court. The more procedural errors the inspector makes during the inspection, the higher the chances will be to refute its results. The presence of a lawyer during the work of inspectors will help to correctly record the violations committed.

If the audit has already been completed, but the taxpayer believes that violations were committed, then he should:

• write down the positions and names of the inspectors who carried out the inspection;
• demand a copy of the decision;
• require written explanations for all activities carried out.

Next, the entrepreneur will need the services of a lawyer. It is necessary to draw up a complaint detailing all violations and demanding a review of the decision. The complaint is sent to a higher tax authority. If a refusal is received, a statement of claim is filed in court.

The main argument in countering the abuse of official powers by tax authorities is preparedness and awareness. It is necessary to know the rules for conducting inspections and familiarize your employees with them. It is advisable to have on hand the number of a lawyer who you can contact for legal assistance.

Rights and responsibilities of the tax service

In Art. 31 of the Tax Code stipulates the rights of the tax service.

Basic powers enshrined in the code:

1. Request all necessary documentation from the payer.
2. Perform checks.
3. Seize documents under lawful circumstances.
4. Call taxpayers for clarification.
5. Limit the right of ownership or other property right, temporarily stop operations on taxpayer accounts.
6. Calculate tax amounts to be sent to the budget.
7. Engage in forced collection of arrears and fines.
8. Within the scope of its powers, submit claims to the courts.

The duties of the Federal Tax Service are given in Art. 32 NK. The primary ones include:

• execution of legislation;
• keeping records of payers;
• providing free information to taxpayers in the field of taxation;
• ensuring the safety of tax secrets;
• sending taxpayers documentation on payment of taxes, audit results and decisions made;
• provision of reference information upon request, reconciliation of calculations.

In their activities, service employees are required to be guided by the explanations of the Ministry of Finance and current legislation.