Features of building an evidence base for illegal vat refunds in Russia

Abstract

In most countries, value added tax (hereinafter – VAT) is the main one in the system of indirect taxes, performing fiscal and regulatory functions, it acts as a significant source of budget revenues. The largest volume of revenues to the federal budget of the Russian Federation is occupied by VAT. Companies can refund the VAT paid, and the part of the “input” tax that exceeds the amount of the calculated VAT is subject to reimbursement. On the one hand, this possibility leads to the attraction of working capital, an increase in business activity, and on the other hand, there is a criminal tendency to receive reimbursement from the budget for VAT amounts. At the moment, the tax authorities of the Russian Federation are detecting an increase in the share of VAT refunds in the total amount of VAT receipts and, along with this, an increase in tax refunds presented by taxpaying companies. The methods used by fictitious companies for unjustified VAT refunds are very diverse, and include such fictitious transactions as: falsifying company transactions, establishing fake accounting and office work, and using companies that do not fulfill their tax obligations. The article discusses the features of building an evidence base for illegal VAT refunds in the Russian Federation.