Regulation of Tax Debt

Author Name(s): Marina E. Orlova1, Farida F. Adigamova2, Kseniya B. Valiullina3, Igor G. Nikitenko4
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Abstract

The article is devoted to the adjustment of the legal base for collection of tax debts; as well as approaches to identifying uncollectible tax debts. The historical aspects of the legal framework formation for the settlement of uncollectible debts in Russia are determined. The structure of taxation is analyzed. The possibilities of taxpayers’ abuse of existing mechanisms for writing off tax debts have been explored. An analysis was made for the standard uncollectible tax debts. Emphasis was placed on the regulatory framework of the rules for recognition and relief of debts, fines and penalties on taxes. Ineffectiveness of the institution of bankruptcy was revealed. Norms were presented to prevent bankruptcy by organizing financial monitoring of the conditions available in an organization. This paper also focuses on restoring documents to tax authorities from taxpayers, their contractors, and conducting tax audits.

Introduction

Failure to fulfill or improper fulfillment of the obligation to pay taxes and fees is the basis for applying the mechanism of enforced collection of tax debts on the part of the state [13. Thomson, W. ]. At the same time, an effective legal mechanism for ensuring tax payments, on the one hand, implies the effective collection of tax payments that were not timely received by the treasury, and the corresponding penalties and fines, and, on the other hand, should be aimed at guaranteed compliance with the inalienable rights and economic freedoms of taxpayers enshrined in the Constitution of the Russian Federation. At the same time, the current mechanism for collecting tax payments is characterized by a significant amount of tax debt.

An important factor is the use of illegal schemes to avoid paying taxes. Thus, the analysis of economic activities of legal entities registered in our country allows us to say that more than 40% of those organizations are created to participate in schemes of tax evasion, schemes for legalization and withdrawal of assets abroad. [9. Nejadmalayeri, A.  Singh, M. ] Of course, one of the reasons for this situation is the absence of real legal barriers to the creation of such entities and, first of all, legislation on registration.

Conclusion

We consider it expedient to fix the need for notifying the tax authorities to the foreign organizations contributing to the authorized capital of Russian organizations. Often this is the first step towards the illegal dissolution of an organization with tax arrears with the help of offshore companies [8, Mazhar, U., Méon, P. -G.], and in case of notifying the tax authorities, they will have the opportunity to prevent the use of such illegal schemes.

It is proposed to consolidate legislatively the prevention of bankruptcy by organizing financial monitoring of the state of affairs, both in each organization and in the industry as a whole, developing an anti-crisis management mechanism, closing unprofitable industries, and predicting bankruptcies of insolvent and unprofitable organizations.

It is necessary to clarify the norms of Russian tax legislation with respect to the procedure for collecting tax arrears at the expense of officials and owners of organizations.

It is necessary to consolidate legislatively in the Tax Code of the Russian Federation the demand for documents by the tax authorities both from taxpayers and their counterparties beyond tax audits, with a view to monitoring their financial situation. The regulatory framework, which will allow for the diagnosis of bankruptcy and anti-crisis regulation will prevent an increasing number of bankruptcies, would help to avoid the dissolution of many enterprises, what has a big impact on the level of tax arrears in the Russian Federation as a whole.

Acknowledgments

The work is carried out according to the Russian Government Program of Competitive Growth of Kazan Federal University.

References

[1] Decree of the Government of the Russian Federation dated February 12, 2001. No. 100 “On the procedure for recognizing uncollectable the arrears and the write-off of deficiencies and arrears on penalties and fines for federal taxes and fees” (as amended by the Decrees of the Government of the Russian Federation dated 15.08.2002 N 602, dated 25. 11. 2004 N 678, dated 04. 11. 2006 N 652)

[2] Order of the Federal Tax Service dated August 19, 2010. N YAK-7-8 / 393 @ “On approval of the procedure for writing off the deficiencies and arrears of fines, penalties and interestы recognized as uncollectible, and the list of documents confirming the circumstances of recognition as uncollectible of deficiencies and arrears of fines, penalties and interests”.

[3] Nekipelova A.D. Russian crisis and rationalization of economic strategy / A.D. Nekipelov // Russian economic journal. – 2014.

[4] Official site of the Federal Tax Service of Russia [Digital source]. Access mode: https://www. nalog. ru

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