A lawyer in the Dispute Resolution and Mediation Practice of ART DE LEX, Anastasia Vasilenko, commented on possible tightening of tax control over citizens’ expenses
Where do you get your money? Fiscal authorities are willing to pay attention to huge purchases citizens make–land, apartments, expensive cars–especially if their tax returns reflect little income. According to the opinion of experts, the Federal Tax Service does not have the ability to check all taxpayers, but interaction with other state authorities will aid the effort to make tax payers more responsible. Details about the effort appeared in an article by Sergei Artemov in Vesti FM:
The Federal Tax Service may monitor citizens’ incomes only through calculations based on the individual income tax enterprises submit and the declarations of those who do not earn wages. A lawyer with the law firm ART DE LEX, Anastasia Vasilenko, said it is apparent that the state is willing to tighten its efforts at tax control. A year ago, it introduced strict procedures for expense reports: “there is no effective system allowing the tax authorities to take action against individual taxpayers who have huge expenses their income does not justify. In many cases, individuals simply claim that they purchased something expensive with their own savings or from their grandparents’ gifts. Certainly, such a pretext seems quite primitive. However, a person is not obliged to account for expenses, without the authorities initiating a criminal proceeding against him, and at the same time, it is unlikely that prosecution will result because of huge expenses that incomes do not justify.”
Izvestia reported that a resident of the Belgorod Region, Oleg Andropov, acquired a piece of land. After its registration, information surfaced that Andropov’s individual income tax reflected no income and that he had not submitted any declarations of income. The territorial branch of the Federal Tax Service prosecuted him, and the regional court obliged him to pay a 13 percent, tax based on the price of the land. The Federal Financial Monitoring Service will inform tax authorities about who bought what and for how much. This service has data on all money transfers from bank accounts as well as on all purchases over RUB 600 thousand. The tax authorities are entitled to obtain such information, even without a court order. In addition, the head of the Tax and Legal Department of the firm Baker Tilly Rusaudit, Edward Kucherov, said that taxes are not the only problem. Police and investigators may initiate criminal proceedings on a charge of money laundering. These authorities are empowered to apply more severe methods, such as interrogation and the use of preventive measures against a suspect. Kucherov added that, in such situations, punishment may be more severe than being honest with the tax authorities. “ The following question may arise: either an individual voluntarily will pay all taxes and penalties and be free from criminal liability or they will have to pay as a result of criminal proceedings.”
The state now is looking for all possible means of meeting its budget. Experts warn that those who purchase real estate without any income during last few years should not count on the fiscal policy to ease. This is a global trend. Members of the “Group of Seven” already have introduced taxes on expenses. Russia may institute the same tax within a year or two.
