The Federal Tax Service will exclude “mass registration” from the grounds for inspection of companies

We are talking about a draft order to amend Appendix No. 1 to the order of the Federal Tax Service of Russia dated December 28, 2022 No. ED-7-14/1268@ (on the grounds, conditions and methods of carrying carried out the measures during the registration of legal entities and individual entrepreneurs), the document is under regulatory impact assessment.

The project is expected to be adopted as early as 2024.

As Ekaterina Boldina, senior methodological expert at SberReshenii, explained to RB.RU, “mass registration” addresses are currently considered one of the possible signs of “passing companies.”

“Such an address may indicate that the company is deliberately hiding from inspectors. If, in the case of an audit, such a fact is confirmed, then for those who work with said company, the risk of being denied, for example, VAT deductions, or of being excluded from the tax base expenses made in favor of the indicated company increases,” Boldina explained.

The expert believes that if the initiative of the Federal Tax Service is approved, not only the procedure for registering new companies will be significantly simplified, but also the likelihood of marks appearing in the Unified State Register of Legal Entities about the lack of data reliability. for existing organizations.

“In this way, companies will be able to work more calmly with companies registered in a mass address, without forgetting, of course, due diligence in the choice of counterparties,” Boldina explained.

The expert added that the initiative demonstrates that the government’s confidence in companies is growing and the prospect of legitimizing a loyal attitude towards the direction of “massive” registration confirms this.

According to the head of the audit and consulting group “AIP”, Sergei Elin, this criterion must be evaluated taking into account all factors.

“The tax authorities have a procedure to visit an address and verify the actual presence of a company at that address. “Mass registration” is not always proof that the company is located at this address. For example, in some real estate properties, business centers are listed as a general address. It happens that the division occurs at the level of individual letters, cases, etc. This is not always clearly identified in the system; sometimes “duplication” occurs. And with such technical inaccuracies, the company may fall into the category of “mass registration”, but in reality the company is located at this address in good faith,” said Elin.

Business representatives believe that the abolition of controls as a result of mass registration is not so important. The managing partner of the company “+7 Productions”, Alexander Krivosheev, says that entrepreneurs easily register an LLC, and even more so an individual entrepreneur at the registration address of the founder or the entrepreneur himself. And the actual address of the company is where they rent an office.

“Massive registration addresses are a thing of the past. And now they are used by companies that do not expect to carry out legitimate activities. Yes, there are exceptions, if in reality there are between 5 and 10 companies and they are individual entrepreneurs who have made their facilities a kind of “coworking” by raising money. But in general, mass targeting is a rather negative phenomenon for both companies and their potential customers,” says Krivosheev.

At the same time, excluding “mass registration” from the reasons for inspections will simplify the registration procedure itself and minimize the loss of time on verification, which will “make life easier” for companies.

Krivosheev is confident that in this case, companies registered at mass addresses will simply come under the special control of the Federal Tax Service in operational work.

“The service can carry out inspections very systematically and efficiently. Therefore, the risk that once the change is approved the number of temporary and dubious companies will increase is also small,” says a business representative.