About simplifying tax accounting

This complies with the provisions of The Guidelines of the Fiscal Policy of the Russian Federation in 2014 and Planning Period of 2015 and 2016 which provides for such measures of enhancing the tax legislation. Approximating the tax accounting rules to the bookkeeping rules is also provided for by the Enhancing Tax Administration Road Map (Russian Government's Order of February 10, 2014, No. 162-r).

In particular, the Federal Law No. 81-FZ unifies the procedure for recognizing income and costs as arising revaluations of assets and liabilities expressed in foreign currency and units of exchange; eliminates the concept of "sum differences"; the taxpayer has been made be entitled to individually settle dates of charging the value of non-amortizable assets on expenses.

The invoice administration procedure has been slightly simplified and refined. In particular, self-employed entrepreneurs have been made be entitled to delegate power to other person to sign invoices issued by the person.

Additionally, the legal gap, which concerns accounting for taxation purposes of the value of donated tangible assets which has been included into taxable earnings at the moment they are booked by the taxpayer, has been eliminated. As a reminder, tax authorities previously required that costs for the purpose of tax accounting be adjusted for the value of such tangible assets. This used to repeatedly become the subject matter of tax disputes.

Simplifying tax accounting, approximating tax accounting to bookkeeping will allow taxpayers to reduce their costs on the administration of and compliance with tax liabilities. Therefore, the started work should further follow the set direction, thereby making business in Russia more appealing for internal and external investors.

Natalya Korniyenko, Natalya Postnikova, Elena Velikova, researchers of Gaidar Institute's Tax System Development Department

The Federal  Law of 20.04.2014,  No.  81-FZ  On the  Amendments to the Second Part of the Tax  Code of  the Russian Federation  makes certain  amendments  aimed at  simplifying tax accounting  by  approximating  the same  to  bookkeeping. 

This  complies with the   provisions of  The Guidelines of the Fiscal  Policy of  the Russian Federation in 2014 and Planning Period of 2015 and 2016  which  provides  for  such  measures of  enhancing the  tax  legislation.  Approximating  the  tax  accounting rules  to the bookkeeping  rules  is  also  provided for  by the  Enhancing  Tax  Administration  Road Map (Russian  Government’s  Order of  February 10, 2014, No.  162-r).

In particular, the Federal Law No.  81-FZ  unifies  the  procedure  for  recognizing income and costs  as  arising  revaluations of  assets and  liabilities  expressed  in  foreign currency and units of exchange; eliminates the concept of “sum differences”; the  taxpayer has been made  be entitled  to  individually  settle  dates  of  charging  the value of  non-amortizable assets on expenses. 

The  invoice  administration procedure  has been  slightly  simplified and  refined. In particular, self-employed entrepreneurs have been  made be  entitled  to delegate  power to other  person  to  sign  invoices issued by  the person.

Additionally,  the  legal  gap, which  concerns  accounting  for  taxation purposes  of the value  of  donated  tangible  assets  which has been  included into  taxable  earnings at the moment  they  are  booked by  the  taxpayer, has been  eliminated. As a  reminder, tax  authorities  previously required  that  costs  for the  purpose of tax accounting be  adjusted  for  the value of such  tangible  assets. This  used  to  repeatedly become  the subject  matter  of  tax  disputes.

Simplifying  tax  accounting,  approximating tax accounting to bookkeeping  will  allow  taxpayers  to  reduce  their  costs  on  the  administration of  and  compliance  with  tax  liabilities. Therefore,  the  started  work  should further  follow the  set  direction, thereby  making  business in  Russia  more  appealing for  internal and  external investors.  

Natalya Korniyenko, Natalya Postnikova, Elena Velikova, researchers of  Gaidar  Institute’s Tax System Development Department