From 2019 onwards auditors will forward to tax authorities all supporting documents for payment of taxes

By Elena Rybnikova, Head of Internal Audit, Expertise and Methodology Department

A new article will be introduced in the Tax Code of the Russian Federation on January 01, 2019, namely Article 93.2 which requests audit companies (individual auditors) to submit documents (information) in line with the law signed by the President of the Russian Federation on July 29, 2018.


Elena Rybnikova
Head of Internal Audit, Expertise and Methodology Department
Federal Law N 231-FZ dated July 29, 2018 has amended the Russian Tax Code by introducing a new article, i.e. Article 93.2 requesting documents (information) from audit companies (individual auditors)

The Federal Tax Service of Russia can now request auditors to submit documents used by their clients as grounds for calculation and payment of taxes (levies, social insurance contributions).

Please note that tax obligation arises when it is legally established that a certain entity has taxable items or engages in taxable activities such as property, goods, work, services, sale of goods, work or services, profit, income, expenses or any other circumstance of value. It follows that tax authorities will be able to access almost all documents previously protected by the principle of audit confidentiality as specified in Federal Law N 307-FZ On Auditing.

Moreover, audit companies will not always able to inform their clients that they have been required to submit information to tax authorities as the Federal Tax Service may prohibit auditors to inform their clients about such request.

Why is this important?

Companies used to engage auditors to identify errors and deficiencies as well as rectify the violations found during audits to receive in the end a consistent and proper report. From 2019 onwards, auditors will be required to forward all identified deficiencies to tax authorities, often without being able to warn their clients in advance about such submission.

Important note: Auditors must submit documents to tax authorities within 10 days of the date of receipt of document request.

Please note that companies may conduct annual audits at the request of their founders, and mandatorily if they meet certain criteria.

Audit confidentiality applies to any information and documents received and/or drawn up by an audit company and its employees as well as by any individual auditor and his/her employees with whom an employment contract is entered into when providing services specified in this federal law, except for:

  1. Information disclosed by the entity to which the services specified in this federal law are provided, or with its consent;
  2. Information about the conclusion of contract for audit services;
  3. Information about the amount of audit service fee.

Our recommendations

We recommend preparing for audits more carefully in 2019. It is better to be sure before the audit that no deficiencies can be found in accounting and tax accounting. Although we do not conduct audits per se, we can and would be pleased to assist in determining the correctness of accounting in preparation for external audits by performing a preliminary review.

Preliminary review

Our preliminary will allow you to:

  • Identify the deficiencies in accounting as well as possible errors and violations;
  • Determine whether documents comply with the requirements of applicable law;
  • Determine how much accounting data is missing.

If necessary, we can and would be pleased to perform any reconstruction of accounting based on the results of our preliminary review.

Criteria for mandatory audit

An organization will be subject to a mandatory audit if:

  • The organization is incorporated as a joint-stock company;
  • The organization’s revenue from the sale of products or services for the preceding reporting year exceeds RUB 400 million or the asset value recorded in the organization’s balance sheet at the end of the previous reporting year exceeds RUB 60 million;
  • The organization’s securities are traded on exchange;
  • The organization (save for state authorities, local authorities, state institutions) submits/discloses annual consolidated financial statements;
  • In other cases provided by federal laws such as, for example, public companies, self-regulating organizations, banking sector, trade organizers, etc.;
  • The organization is a credit institution, credit history agency, professional participant in securities market, insurance company, clearing organization, mutual insurance company, trade organizer, private pension or other fund, joint-stock investment fund, the management company of a joint-stock investment fund, mutual fund or private pension fund (except for state non-budgetary funds).