Capacity Building

The Federal Tax Service of Russia (FTS of Russia) proactively invests in digital capabilities of tax administration, which has resulted in sustained increase in domestic revenue.
Fostering international cooperation, FTS of Russia shares the expertise in digital transformation with foreign tax administrations and provides various capacity building programs: from trainings and consultations to technical assistance in IT solutions implementation and modernization of information systems.
Technical assistance can be provided at the request of a foreign tax administration. In major cases, the technical assistance is tailored to the needs of foreign tax administrations taking into account differences in tax policy and digital maturity.
The FTS of Russia has extensive experience in implementing a wide range of digital solutions in the field of tax administration, which allows us to consult foreign countries on the implementation of modern mechanisms for providing better services to taxpayers and increasing effectiveness of tax audit.
A comprehensive survey of the current tax administration system helps to identify areas of improvement in order to increase tax collection and simplify the compliance process.
Advisory services and analytics include:
Tax policy analysis
Review of tax administration’s business processes
Supporting implementation and modernization of tax administration’s systems
Advisory services on enhancement of systems and processes to better serve taxpayers and decrease tax compliance burden.
Tax administration information system includes: interfaces to allow taxpayers to register, file and pay taxes electronically; data warehouses; data matching; internal control functions; and management information systems.
Extensive experience in technical assistance to foreign tax administrations allows the FTS of Russia to go beyond the existing products and build a full-custom solution based on the most recent trends in tax technology.
Improvement of tax administration information system includes:
Technical audit of existing information and communication technology system and elaboration of the development strategy and design of the information system
Implementation of the new tax administration information system or renewal of the existing one
The FTS of Russia conducts technical audit of the current IT infrastructure and relevant systems and processes, including data centers and telecommunications.
Advisory services and analytics include:
Comprehensive analysis of tax administration processes with regard to the IT infrastructure used
Audit of the current architecture of information systems, structure and hierarchical model of databases with regard to the IT infrastructure and telecommunications used
Information security audit
Preparation of the development strategy and the concept of modernization of the existing IT infrastructure
ACS VAT is a software that provides automation of crosschecking of VAT tax returns and electronic invoices.
Prerequisites for the introduction of ACS VAT:
Impossibility of manual control over each operation subject to VAT
Lack of centralized data for a detailed analysis of the chain of financial and economic transactions between counterparties
VAT tax reporting only contains summary indicators, which does not allow the determination of correctness of VAT calculation and payment
The ACS VAT uses a risk-based approach that forms an expert opinion about a taxpayer based on a set of parameters and assessment of the possibility of committing a tax violation by a taxpayer.
The ACS VAT algorithm mirrors the reflection of transactions from the buyer and seller in tax returns.
The ACS VAT allows to compare all counterparty transactions in real time, identify VAT tax gaps, tax risk zones for non-transparent transactions and informs the user about it.
The system allows to automate tax procedures and minimize the human factor influence during inspections, which increases the effectiveness of tax control.
Functional directions of the ACS VAT:
Visualization of relations between taxpayers
The scheme of the commodity activity of the taxpayers on the basis of invoices with additional data
Identification of tax gap and chains of VAT evasion
Search for a tax gap based on the received tax reports and electronic invoice data
Automated determination of taxpayer chains using unjustified tax benefits based on configured criteria
Risk analysis of taxpayers and tax returns
Forming a comprehensive opinion about the taxpayer and forecasting the fact of committing a tax violation
Dashboards with macroeconomic indicators
Online operational control of VAT turnover with the ability to view details of each business entity
Assessment of the effectiveness of the tax authorities’ activities
Monitor the effectiveness of tax authorities' activities in the event of a tax gap and shadow operations
Implementation stages:
Examination of the current model of VAT payment tax control
Preparation of recommendations on changing the regulatory framework
System development
Implementation of the system in pilot and commercial operation
Maintenance of the implemented system (if necessary)
Implementation result:
For the tax authority:
Identification and suppression of the activities of fraudulent taxpayers
Availability of accurate data on the volume and value of trade turnover by region and industry sector
Reduction of labor and material costs
For business:
Reduction of administrative burden
Reduction of the number of audits
Creation of a comfortable environment for doing business
For the economy:
Warning about the suppression of unfair competition
Increasing the transparency of the economy by reducing the shadow sector
Receiving additional tax revenues to the budget
VAT-Lite is a simplified version of automated VAT administration, which does not imply an electronic invoice system to be mandatory.
Information on all transactions of the taxpayers is collected in the VAT tax returns in the form of invoice registers. It allows to comply with the principle of mirroring of taxpayers' data and identification of the tax gap as implemented in the ACS VAT.
The VAT-Lite Administration Platform is the most convenient adaptation of ACS VAT for a small number of administered taxpayers. Tax reports are sent to the tax authorities either via the taxpayer's personal account or by means of via EDI operators.
The functional areas of the VAT-Lite Platform are similar to the ACS VAT. However, they can also include the taxpayer's Personal Account online service for submitting VAT returns.
The stages and results of the implementation are similar to the stages and results of the implementation of the ACS VAT.
The Automated Online cash registers control system is a unified system for collecting, processing and storing primary data on the entire retail trade in real time.
Prerequisites for the implementation of the Online cash registers control system:
Incompleteness of information on the subject and volume of retail trade
Lack of real-time analytics about socially significant sectors of the economy
Non-transparent retail activities
The system is designed for automated control over the use of cash register equipment and compliance with taxpayers cash discipline.
The system has real-time information about the movement of each unit of goods, it determines the objects of tax risk and informs the user about them.
Online cash registers control system is the final tool for controlling the movement of goods from the manufacturer to the final consumer.
Prerequisites for the implementation of the Online cash registers control system:
Survey
Supply of cash registers equipment (if necessary):
  • Receiving complex of cash receipts
  • Receiving complex of cash receipts of tax authorities
  • Information platform of cash receipts of tax authorities
  • Fiscal module software (physical devices / cloud solutions)
System and mobile application development
Introduction of the system into pilot and industrial operation
System maintenance (if necessary)
Implementation result:
For the tax authority:
Legalization of retail trade and services
Identification and suppression of the activities of fraudulent taxpayers
Possession of real-time information about the movement of each unit of goods
Control over the entire chain of movement of goods – from production (import) to the consumer
For business:
Reduction of administrative burden
Instrument of civil (public) control
Prevention and suppression of unfair competition
For the economy:
Increasing the transparency of the economy by reducing the «illegal trade turnover»
Obtaining real statistics based on primary data
Additional tax receipts
The main task of the special tax regime is to create a simple and convenient way to legally conduct business and pay taxes for "micro-entrepreneurs".
All the interaction between the self-employed and the tax authority takes place remotely via a mobile application and a Taxpayer Personal Office. The self-employed person does not need to file tax returns or acquire a cash register, as the application itself keeps track of income, calculates taxes and generates an electronic receipt.
The introduction of a special tax regime for the self-employed and its digitalization in Russia has motivated a large number of small entrepreneurs to operate legally and allowed them to officially conduct business and pay taxes.
Advantages of special tax regime:
Simplified registration. Registration is fully processed via mobile application
Minimal tax rates. No other mandatory payments
Tax deduction during registration
Performing activities without the need to register as a legal entity or individual entrepreneur
Interaction with any legal entities, including foreign ones
A convenient way of processing payments with customers. Ability to use a personal card without the need to open a separate bank account.
Privileges identical to those of a legal entity or individual entrepreneur. Grants, participation in public tenders, lease of state property, confirmation of income, visas, etc.
No declarations and reports. Revenue accounting is processed automatically in the mobile application
Control documents (receipts) formation. No need to buy a cash register. Receipts can be issued in the mobile application
Automatic tax payment via linked bank card in mobile application
System functionality:
Online registration and verification of self-employed citizens
Taxpayer Personal Office for the self-employed (including self-employed profile and the possibility to receive notifications from the tax authority)
Creation of a sales receipt and transmission of data to the tax authorities online
Automated tax base calculation based on cash register receipt data
Online tax payment option and automatic payment function
Mobile taxpayer application for Android and iOS operating systems
Implementation process stages:
Survey
System development (reception complex, information processing and storage), mobile application and Taxpayer Personal Office for the self-employed
Pilot version of the system
Production run
System management (if necessary)
Implementation result:
For the tax authority:
Small business tax administration process automation
For business:
Legalization of professional activities
Simple and convenient conditions for running a small business
Official self-employed status and access to government benefits
For the economy:
Increase in the economy transparency due to legalization of all business activity spheres
Additional tax revenue for the budget
Real-time information on goods and services sold by small businesses
The application of the Common Reporting Standard (CRS) provides for the annual automatic exchange of financial account data in accordance with Article 2 of the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information of October 29, 2014, signed by the Russian Federation on May 12, 2016.
The identification and risk profiling system allows to:
Automate the identification of received data through verification with internal databases
Detect non-payment of taxes on foreign income by comparing with the tax returns data and form risks
Provide visualization of the automatic exchange data for the tax authorities analytical work
Automate risk processing controls to monitor the risk processing throughout its lifecycle
Inform taxpayers about the identified risks through a Taxpayer Personal Office for self-declaration
Functional areas of the system:
Data processing
Extraction and primary processing of received data and preparation for analysis. Transliteration and normalization of the data are carried out due to the language differences (data input is in Latin transcription)
Automatic data identification
The processed data is simultaneously compared with all internal data sources to search for matches. A record is considered identified only if two elements of the original record match the internal database (e.g., name and date of birth)
Verification module
If a record cannot be uniquely identified automatically, it is passed to the manual verification module
Risk Profiling
Calculation and visualization of risks of non-payment of taxes from foreign sources, calculated on the basis of identified data
Processing of identified risks
Monitoring of the effectiveness of the tax authorities in dealing with the identified risks
Implementation process stages:
Survey
Preparation of recommendations for regulatory framework changes
System development
Implementation of the system in pilot and commercial operation
Maintenance of the implemented system (if required)
Implementation result:
For the tax authority:
High level of identification of automatic exchange data
Automatic detection of risks of undeclared foreign income
Efficient handling of data and identified risks
Declaration of foreign income by taxpayers in subsequent periods
For the economy:
Reduction of the capital outflow
Returning under-paid taxes to the budget
Contact us

Elisey Balta

Head of International Cooperation and Capital Movement Control Directorate
+7 (495) 913-02-35
balta@tax.gov.ru

Alexey Spitsa

Deputy Head of International Cooperation and Capital Movement Control Directorate
+7 (495) 913-00-00 (ext. 12-36)
a.spica@tax.gov.ru

Ekaterina Mikhailu

Head of International Projects Division
+7 (495) 913-00-00 (ext. 16-49)
e.mixajlu@tax.gov.ru

Alla Bagryantseva

Head of Technical Assistance Division
+7 (495) 913-00-00 (ext. 19-12)
a.bagryanceva@tax.gov.ru