en
Which indicators does the tax authority verify in Appendix No. 1 of the Profit Tax Declaration?
Which indicators does the tax authority verify in Appendix No. 1 of the Profit Tax Declaration?
In practice, the following indicators from Supplement No. 1 submitted by the taxpayer are checked:
Fixed Assets: Checks are conducted on depreciation and repair expenses, property taxes, and comparison of income from the sale of depreciated assets with income when the depreciation exceeds the norm, among other issues.
Reserves: These impact the total amount of expenses. Regardless of the income and expenditure amounts during the period, the algorithm only considers the difference, whether positive or negative, between the balance at the beginning and the end of the period in the current year (taking the balance at the end of the previous year's declaration). This difference is either subtracted from or added to all expenses incurred in the current year.
Receivables: The balance of receivables at the end of the period is checked against the receivables balance at the end of the period in the VAT declaration for December of the same year, and turnover is adjusted accordingly.
Cash: Income entries are queried by comparing the revenues in the current year's profit declaration with the income reported in VAT declarations.
Assets for Capitalization: The depreciation is consistently compared with the fixed assets' entries and deducted from property taxes.
Other Assets: An explanation may be requested regarding their breakdown and nature.
Net Profit: A comparison is made for the purpose of calculating dividends in the CTC.
Advances: Used when comparing the turnover of VAT and profit declarations.
Creditors: The composition of the deductions in the specified section may be requested. If the taxpayer does not provide the composition of the deductions on creditor liabilities, they are classified as "Forgiven Creditor Debt," and the income in the profit declaration is increased.
One of the situations encountered in practice is that some taxpayers record the amount of the difference between the total of assets and the total of capital and liabilities in the "Other Liabilities" or "Other Assets" sections of Supplement No. 1. By entering an amount with an unclear source into these sections, equality in Supplement No. 1 is artificially ensured. Although investigations into "Other Liabilities" are not common, it is often required to provide explanations for the classification of amounts in the "Other Assets" section.
In practice, the following indicators from Supplement No. 1 submitted by the taxpayer are checked:
Fixed Assets: Checks are conducted on depreciation and repair expenses, property taxes, and comparison of income from the sale of depreciated assets with income when the depreciation exceeds the norm, among other issues.
Reserves: These impact the total amount of expenses. Regardless of the income and expenditure amounts during the period, the algorithm only considers the difference, whether positive or negative, between the balance at the beginning and the end of the period in the current year (taking the balance at the end of the previous year's declaration). This difference is either subtracted from or added to all expenses incurred in the current year.
Receivables: The balance of receivables at the end of the period is checked against the receivables balance at the end of the period in the VAT declaration for December of the same year, and turnover is adjusted accordingly.
Cash: Income entries are queried by comparing the revenues in the current year's profit declaration with the income reported in VAT declarations.
Assets for Capitalization: The depreciation is consistently compared with the fixed assets' entries and deducted from property taxes.
Other Assets: An explanation may be requested regarding their breakdown and nature.
Net Profit: A comparison is made for the purpose of calculating dividends in the CTC.
Advances: Used when comparing the turnover of VAT and profit declarations.
Creditors: The composition of the deductions in the specified section may be requested. If the taxpayer does not provide the composition of the deductions on creditor liabilities, they are classified as "Forgiven Creditor Debt," and the income in the profit declaration is increased.
One of the situations encountered in practice is that some taxpayers record the amount of the difference between the total of assets and the total of capital and liabilities in the "Other Liabilities" or "Other Assets" sections of Supplement No. 1. By entering an amount with an unclear source into these sections, equality in Supplement No. 1 is artificially ensured. Although investigations into "Other Liabilities" are not common, it is often required to provide explanations for the classification of amounts in the "Other Assets" section.