Russian Federal Tax Service plans to build a new digital system that will result into 100% electronic document management in the b2b sector. Its implementation is scheduled to 2024.
This should accelerate the turnover of data in the economy; help the companies to cut the costs of printing and storing paper documents, which are impressive; decrease the burden of tax control and the number of requests from tax authorities and other government agencies. Since the tax service will receive online access to all transactions and primary documentation of the companies this could potentially result into introduction of new tax regimes providing for calculation of the taxes by the tax authorities rather than the taxpayers. This would simplify the administrative work within the companies and relieve them from the liability for incorrect payment of taxes.
However, absolute transparency will be the price to be paid for increased convenience. The new digital system will eradicate grey zones in business activities. Small businesses might also need additional help to get accustomed to the new reality.
In the light of this reform, a new tax regime for retail companies with automatic payment of taxes may appear in Russia in 2021. If introduced, retailers that now use online cash machines transmitting information on transactions to the Federal Tax Service in real time, will be exempt from mandatory reporting to the tax authorities.
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NAZALI TAX & LEGAL |