Submission of explanations on VAT at the request of the tax authority

When the tax office asks for clarification on the submitted VAT report

The conditions regarding the provision of explanations to the tax authorities for the VAT return are set out in paragraph 3 of Art.
88 Tax Code of the Russian Federation. After the VAT payer has submitted a declaration to his Federal Tax Service, tax officials must carry out a desk audit of the document. And if during the process they have questions, the payer who filed the declaration is sent a request for clarification of points that are unclear to the tax authorities. The main cases when a request for clarification on a declaration will definitely be sent to the payer are:

if errors are found in the declaration (for example, inconsistency of control values);
if the declaration data does not coincide with the information available to the tax authority for a given payer (for example, the tax authorities have data from counter audits with the payer’s counterparties, according to which one amount of turnover is obtained, but the calculation submitted by the payer indicates another);
based on the results of the submitted declaration, the amount of VAT to be deducted (refunded) from the budget is obtained;
when submitting an adjusted declaration, the adjusted amount of VAT payable to the budget is less than it was in the original calculation.

There are other options available besides those listed. However, they are all combined into logical groups that are assigned a specific code.

When is an explanatory note required?

When conducting an inspection, the inspector has the right to request written explanations. Situations in which it is mandatory to provide an explanatory note to the tax office upon request (we offer a sample for NPOs) are specified in clause 3 of Art. 88 Tax Code of the Russian Federation:

Errors in submitted reports. For example, inaccuracies or inconsistencies are identified in the declaration. In this case, tax authorities require you to provide justification for these discrepancies or send a corrective report.
In the adjusting statements, the amounts payable to the budget are significantly lower than in the initial calculations. In such a situation, the inspector may suspect a deliberate understatement of the tax base and payments and will demand an explanation for the changes.
The submitted income tax return reflects losses. In any case, you will have to justify unprofitable activities to the Federal Tax Service, so you can prepare an explanatory note on losses in advance.

The inspection request must be responded to within 5 working days from the date of official delivery of the request - such norms are enshrined in clause 3 of Art. 88, paragraph 6 of Art.

What is an error code in a Federal Tax Service request?

We present the coding and breakdown of groups of possible errors in the table.

Code	The essence of the comment	Example situation
1	Discrepancy between the data in the payer’s declaration and the data in the declaration of his counterparty	The counterparty, the settlements with which are included in your declaration, submitted a zero report for the same period or did not submit it at all
2	Discrepancies between data from tax registers - purchase books (section and sales books (section 9)	A typical situation is the deduction of VAT on advances received for which tax was paid in earlier periods
3	Discrepancies between data from the journals of invoices received (section 11) and issued (section 10)	The intermediary has an invoice for the entire amount of the intermediary transaction
4	Other discrepancies and inaccuracies	For example, inconsistencies in indicators in the declaration columns. In this case, as a rule, when indicating code 4, the coordinates of the place of declaration in which there is ambiguity are indicated next to it in brackets
5	Errors in invoice dates in sections 8–12	The invoice date is not specified or the invoice date specified exceeds the reporting period for which the declaration is submitted
6	VAT deduction is overdue	You claimed a deduction beyond three years
7	You have claimed a VAT deduction based on an invoice drawn up before the date of state registration	—
8	Incorrect indication in sections 8–12 of the transaction type code	More information about the codes can be found here.
9	Errors were made when canceling entries in section 9	The VAT amount indicated with a negative value exceeds the VAT amount indicated in the invoice entry subject to cancellation, or there is no invoice entry subject to cancellation

Indicating the error code should help the payer understand what exactly the tax office did not like in his return, as well as provide the most appropriate explanations for the situation.

How and within what timeframe do you need to send clarifications on VAT at the request of the tax authorities?

In Art. 88 of the Tax Code of the Russian Federation states that clarifications on reporting requested by tax authorities should be submitted no later than 5 working days. However, the tax legislation does not specify what is considered the starting point for counting these 5 days.

ATTENTION! If the request for documents was received during non-working days established by the President of the Russian Federation from 03/30/2020 to 05/11/2020 due to the spread of coronavirus infection, then the deadline for submitting explanations is extended by 10 working days (letter of the Ministry of Finance of Russia dated 04/15/2020 No. 03-02 -08/29938).

ConsultantPlus experts spoke about measures to support businesses during the coronavirus pandemic:

If you do not have access to the system, get trial online access and upgrade to the Ready Solution for free.

According to the norms of paragraph 5 of Art. 174 of the Tax Code of the Russian Federation, almost all VAT payers submit declarations in electronic form.

IMPORTANT! If the declaration is submitted via electronic communication channels, then further interaction between the tax authorities and the payer should occur in the same way. This is stated in the order of the Federal Tax Service dated April 15, 2015 No. ММВ-7-2/ [email protected]

That is, requests for clarifications to declarations must also be sent electronically.

At the same time, in paragraph 5.1 of Art. 23 of the Tax Code of the Russian Federation states that in the case when the tax office sends an electronic document (request) to the payer, the taxpayer confirms receipt by sending a receipt of its acceptance. The receipt must be sent within 6 days from the date of receipt of the document from the tax office.

That is, if we consider the sending of a receipt as confirmation of receipt, we can assume that the period of 5 days begins to run from the moment such a receipt is sent. Otherwise, it turns out that explanations must be submitted before a receipt confirming receipt of the request for these explanations.

At the same time, the letter of the Federal Tax Service dated November 6, 2015 No. ED-4-15/19395 states that 5 days for preparing explanations should be counted from the date of receipt of the request. Let us remind you that in accordance with paragraph 4 of Art. 31 of the Tax Code of the Russian Federation, the day of receipt of the request is considered to be the day following the day the request is posted in electronic access for the payer (for example, in the payer’s personal account on the Federal Tax Service website).

Thus, the question of when to start counting the days for providing explanations after a tax office request is not clearly defined by law. If the request came in electronic form, we recommend that when determining the deadlines, rely on the explanations of the Federal Tax Service, namely: count 5 working days from the working day following the day when the corresponding message from the Federal Tax Service appeared on your electronic resource.

IMPORTANT! In accordance with Art. 129.1 of the Tax Code of the Russian Federation, the fine for explanations not submitted or submitted on time is 5,000 rubles. for the first violation within a year and 20,000 rubles. - if repeated.

Instructions for responding to tax demands for VAT returns

You have received a request from the tax office to provide explanations on your return. What are your next steps:

Step 1. You must send a receipt of receipt within 6 days from the date of receipt (clause 5.1, Article 23 of the Tax Code of the Russian Federation). If you have not done this within the allotted time, then the inspectors have the right, within 10 days after the deadline for transmitting receipts, to make a decision to suspend transactions on the accounts (clause 3 of Article 76 of the Tax Code of the Russian Federation).

Step 2. Check which form to send the explanation. The company must provide electronic explanations if the inspectors have requested them on the basis of clause 3 of Art. 88 Tax Code of the Russian Federation. The company has the right to send explanations and other requirements on paper if it submitted a paper declaration.

Step 3. Find out which discrepancies need to be explained. To do this, tax authorities in their request indicate errors made by the payer using special coding. For example, for control ratios that are missing in the sales book, invoices, discrepancies in the purchase book, etc. For this purpose, tax authorities use special coding in their request.

Error code 1 means that: there is no transaction entry in the counterparty’s tax return; the counterparty did not report value added tax for the same period; the counterparty's tax return contains zero figures; errors made in the report do not make it possible to identify the invoice and compare it with the data of the counterparty’s declaration.
Error code 2 means that the transaction data between section 8 “Information from the purchase book” and section 9 “Information from the sales book” of the tax return for the reporting period has discrepancies. This can happen if the amount of tax on advance invoices calculated earlier was accepted for deduction. In this case, clarification on advances is necessary.
Error code 3 means that the data on transactions between section 10 “Information from the log of issued invoices” and section 11 “Information from the log of received invoices” of the tax return submitted to the tax authority do not correspond to each other. This can happen, for example, when entering information about intermediary operations into the declaration.
Error code 4 indicates an error was made in any column of the declaration (the number of the column with a possible error will be indicated in parentheses).

In what format should explanations be submitted?

Let us immediately clarify that the response to the tax office’s request for clarification on the VAT return can be in 2 options:

Option 1. If the declaration initially contained an error when filling it out, which affected the amount of VAT payable, then in response to a request from the Federal Tax Service, an updated declaration should be submitted.

Read more about this in the article “How to make an updated VAT return in 2020?”.

Option 2. If the data in the declaration will not change, but it needs to be deciphered for tax authorities, you need to create explanations and send them to the tax office.

The format of explanations for VAT is electronic only (unlike explanations for other taxes, which can be submitted both electronically and in paper form). The mandatory electronic format of this document is established by order of the Federal Tax Service dated December 16, 2016 No. ММВ-7-15/ [email protected] The document is a set of electronic tables that should be filled out by the payer for each figure in the declaration that raised questions.

Non-formalized documents in addition to the response to the Federal Tax Service requirement

The Tax Department allows documents to be sent electronically in other formats. Non-formalized documents attached to the tax response for VAT include documents in the form of scanned images in tif, jpg, pdf or pgn format.

You can send the following documents in the form of a scan via TKS (Table 4.9 to the Order of the Federal Tax Service dated June 29, 2012 No. ММВ-7-6/ [email protected] ):

invoice;
waybill;
act of acceptance and delivery of works (services);
cargo customs declaration/transit declaration;
additional sheet to the cargo customs declaration/transit declaration;
specification (calculation, calculation) of price (cost);
waybill (TORG-12);
addition to the contract;
agreement (agreement, contract);
adjustment invoice;
R&D report.

The taxpayer does not have the right to send other documents in the form of scanned copies to the tax office (Letter of the Federal Tax Service dated November 3, 2016 No. ED-4-15/21002).

From this year, you can only respond to tax authorities’ demands electronically. A new format for sending explanations to the VAT return has also been adopted. In the article you will find instructions on how to respond to requirements, and also learn what nuances there are when responding to different types of requirements.

Form of explanations for the VAT return: sample

Since VAT explanations must now be submitted strictly via electronic communication channels in the form established by the Federal Tax Service, samples of paper explanations previously presented on professional websites on the Internet have lost their relevance.

The ability to prepare electronic explanations in the required format is implemented in the “Legal Taxpayer” program.

See more details here.

In addition, if you use the services of electronic document management operators, they also allow you to send explanations. For example, if the Federal Tax Service sends a request through “Kontur”, an xml file is attached to the message, using which you can generate a tax response. To clarify how to respond to the tax authorities, please contact the operator through whose system you received the request.

This feature has been implemented in 1C. The form of explanations in 8 should be looked for as follows: Directories - VAT reporting - Clarification of declaration indicators - Submission of explanations at the request of the tax authority.

What documents must be attached to the explanations?

The form of explanations does not imply the submission of additional documents (copies) along with it. The tables are designed in such a way that if they are filled out correctly, tax authorities will see all the information they need:

information from primary accounting documents (invoices);
details of primary documents;
data from tax registers - sales books and purchase books;
the amount of identified discrepancies in relation to the primary data and registers;
the amount of adjustments made;
Payer comments on discrepancies.

Therefore, there is no need to provide documentation along with explanations. However, it should be borne in mind that in some cases, during the audit, the tax office has the right to request documents.

If you have access to ConsultantPlus, check whether you have correctly compiled and submitted explanations for the VAT return. If you don't have access, get a free trial of online legal access.

There is a lot of interesting information about documentary tax audits here.

The company reflected the VAT refund in its return: what to expect?

Let's consider an example: Ellada LLC filed a tax return for the 1st quarter of 2021, in which it indicated VAT to be refunded.

Our checklist will help you fill out the declaration for the 1st quarter of 2021, which can be downloaded in the material “Checklist for filling out the VAT return for the 1st quarter of 2020”.

By submitting a declaration with the amount of tax to be refunded, the company was prepared for the fact that tax authorities would pay close attention to its report, so it prepared the necessary documents in advance (invoices, primary documents, purchase and sales books).

However, having received a request from the tax authorities to submit documents, the company was surprised to discover that in addition to the initial statements and invoices, the controllers also requested a number of other documents (accounting policies, analysis of accounts, explanations regarding sources of financing, etc.). We will consider what to do with this request further.

Read about the form in which explanations for filling out the declaration must be submitted to the Federal Tax Service here.

See also “What to answer the inspection’s request for clarifications on the VAT declaration?”

The criteria by which tax authorities check a declaration when refunding VAT are discussed in detail in the ConsultantPlus Ready Solution. Get trial access to the system and start learning the material for free.

Explanations are provided: how to find out about the results

After sending explanations to the Federal Tax Service, taxpayers have questions:

How to confirm the fact that the tax office has received clarifications?
How can I find out the results of reviewing the explanations?

The answer to the first question is related to the system for sending explanations via electronic communication channels. Upon receipt of a tax document, the taxpayer receives an electronic notification about this, certified by the electronic signature of an authorized person. Or, if the explanations are not accepted, a refusal will be issued in the same way. Refusal is possible only in one case - if the explanations are sent in the wrong format.

As for the results of checking the explanations at the tax office, the current provisions of the law do not provide for the obligation of the Federal Tax Service to specifically inform payers about the results of consideration of their explanations.

So the results can only be learned in indirect ways:

Conduct a reconciliation with the tax office some time after submitting clarifications and explanations. If the accruals on the personal account coincide with the updated (explained) data, then the explanations have “passed”.
Receive a repeated request for clarification or a document verification order. From which it can be concluded that the explanations presented “did not pass.”
There is also the option to contact the contractor who sent the request. However, today this method may not be justified. On the one hand, the operating procedure of the Federal Tax Service Inspectorate itself is aimed at minimizing personal communication between employees of the Federal Tax Service Inspectorate and payers. On the other hand, as we noted above, the employee you contact has the right to refuse to inform you about the results of the check.

Results

The procedure for submitting clarifications on VAT is now in effect, established by Order of the Federal Tax Service dated December 16, 2016 No. ММВ-7-15/ [email protected] According to this procedure and the requirements of the Tax Code, clarifications are submitted strictly in electronic form. Explanations are created by filling out tables according to the forms and format established by the Federal Tax Service.

Sources:

Tax Code of the Russian Federation
Order of the Federal Tax Service dated December 16, 2016 No. ММВ-7-15/ [email protected]

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