Russian accounting and tax laws are fairly complicated and sometimes contradict each other so much so that they boost the risk of imposition of severe penalties by state authorities. It is therefore necessary to ensure that accounting staff is highly qualified as well as ensure close monitoring of accounting functions. It is, however, not always possible to find good professionals, and as a result, it is sometimes necessary to reconstruct accounting and tax accounting records.
The main purpose of accounting and tax accounting reconstruction is to avoid the imposition of penalties by tax authorities, or at the very least to minimize them as much as possible.
When is the reconstruction of accounting and tax accounting records required?
- Accounting and tax accounting have not been kept properly;
- There is a reasonable doubt as to the professionalism of accounting staff;
- An audit has identified areas of improvement;
- Loss of a considerable amount of primary documents;
- Imposition of penalties by state authorities.
We provide our services in 3 stages
Stage 1 Analysis of accounting and tax accounting:
- Preparation of requests to relevant organizations to obtain factual evidence of assets and liabilities (bank, tax authorities, extra-budgetary funds, statistical authority, etc.);
- Analysis of foundation documents and other organizational/administrative documentation;
- Review and sorting of contracts, primary and other accounting and tax accounting documents;
- Document verification to ensure that they comply with applicable accounting and tax laws;
- Reconciliation of transactions recorded in accounting database with primary and other documents actually available;
- Drafting a status report on accounting and tax accounting.
Result: Submission of a report on outstanding documents with an estimated amount of tax risk, a draft accounting policy and recommendations for reconstruction of accounting and tax accounting records.
Stage 2 Bringing accounting and tax accounting in line with the law:
- Correcting the transactions in accounting and tax accounting database;
- Conducting reconciliations with counterparties;
- Drafting a report on the findings made in Stage 2.
Result: Formation of accounting and tax accounting database in accordance with applicable accounting and tax laws, submission of a report with an exact amount of tax risk, submission of a revised accounting policy and of a description of the situations that need to be addressed by clients to continue reconstruction.
Stage 3 Obtaining tax clearance certificate from state authorities:
- Adjusting accounting and tax accounting database as per client’s instructions;
- Preparing and submitting all reporting forms;
- Reconciliation with state authorities (tax, extra-budgetary funds, etc.)
- Handling tax refund in case of overpayment.
Result: Obtaining tax clearance certificate from state authorities, decision for tax refund (in case of overpayment) and submission of a report on the work done.
Please note that the content of each stage may vary depending on the activities performed by each individual client.