Management accounting as a way of managing business risks, tax risks and creating a safe business. How to correctly set, what tasks to provide, how it helps in structuring taxation
The main goal of business restructuring (let alone splitting up, in order to obtain savings through the use of special tax regimes) is to create the full appearance that all artificially created legal entities are independent business entities. And there is some contradiction with the goals of traditional management accounting, the task of which is to show the owner the business as it really is. Therefore, the correct structuring of the business for tax optimization should be accompanied by a change in management accounting.
1. What is the “traditional” management accounting in the organization?
The business environment had a strong influence on the methodology of “traditional” management accounting. Twenty years of Russian business have passed under the sign of “fictitious” legal entities. Real business processes and the set of legal entities used in business had various contours. Part of the business processes proceeded “off balance”.
Therefore, the generally accepted methodology is as follows: create a single register of all recorded operations (the technological platform is not important, it can be the same Excel). And already in this registry to lay out operations in accordance with their real managerial sense.
Sometimes operations from routine accounting are automatically synchronized with this registry, and you just need to add “gray” information with your hands. But this does not change the essence. Such accounting is “double”, because there are always its differences from regular accounting:
1) in the management register, part of the operations has a different meaning, not the same as in the contract and primary accounting documents - in regulatory accounting, the meaning always corresponds to the documents;
2) the management register contains, in addition to operations reflected in the regulatory accounting, operations not reflected there;
3) accounting is carried out in the context of managerial business units, and isolation for legal entities is ignored - in regulatory accounting, accounting is conducted exclusively in the context of legal entities.
At the moment, the market is overwhelmingly “traditional” management accounting. I will give examples.
Excerpt from the blog of the head of the consulting department of a large Russian integrator selling a popular system for managerial accounting (they specialize only in managerial accounting and budgeting):
“If you have a lot of legal entities, you can download a bank statement each individually, you can collect all of them into one folder and click the download button (...) in any company in Russia that sells and buys something, it already has there are up to five legal entities (...) with the construction sites that we have encountered, there are even more than 15 legal entities in them, this includes ipeshniks, that is, they have 3-4 of their companies and somewhere up to twenty ipeshniks (...) and they need to collect all this information ”...
“One legal entity bought the goods, and another legal entity sold the goods to the client (...) the movement between legal entities is exclusively internal (...) the goods might not have arrived from the warehouse to the warehouse, most likely it remained (...) how to avoid a double ? To do this, it is necessary to mark all such counterparties in the system as group companies (...) the program, seeing the sale of one of its legal entities to another, automatically carries out these movements as transit ”...
“In 1C, there may be only 5 (...) simple IPs from your 6-7 legal entities if you pay taxes in a simple way, but 1C it doesn’t have (...) these IPs should also be entered into the system and listed as group companies ( ...) movements along them should go into transit or within a holding ”...
“In Russia, due to some specifics, almost every company can have up to 5 legal entities: one buys, another sells, the third stores, the fourth something else, the fifth IP (...) is a very rather complicated structure (...) in all such companies are not interested in reporting on a specific legal entity to the management; it is interested in consolidated information collected from various sources ”...
Fictitious transactions, fictitious legal entities, fictitious document flow. Many integrators and consultants have similar phrases. They write about Russian realities, about the fact that within the framework of one business, several legal entities and accounts can be taken into account. Only realities have changed.
Another example, from personal experience. I was contacted by an entrepreneur about the implementation of management accounting. He is the owner of several diversified businesses, both trade and production. He already had in his hands a project of another consulting company for setting up management accounting. The action plan did not surprise me (I bring in an abridged version):
a) selection and purchase of a single information base on the 1C platform;
b) the formation of a single classifier of articles;
c) consolidate all business operations in a single database.
The result of the work is a working single consolidated information base for all areas of activity, which allows the formation of the necessary consolidated management reports.
Of course, the phrase was not without: “Develop rules for controlling data discrepancies between accounting and management data”. The case is characterized by the fact that in this case, the entrepreneur's business units corresponded to legal entities. But the consulting company did not even try to offer consolidation based on regulatory reporting. The methodology “to collect all operations in one heap and lay out there according to business projects and managerial articles” is so rooted.
And I myself have repeatedly implemented management accounting in accordance with the “traditional” methodology. And these companies still work the way I introduced it to them. But again, realities have changed.
2. New realities. Double-entry arbitration practice.
What are the risks of double counting today?
1) A different meaning of operations and ignoring the separation of legal entities is a direct confirmation of the fictitiousness of regulatory accounting;
2) the presence in the same registry next to the “gray” operations of “white” operations, which are confirmed by documents and are reflected in the tax reporting, will not subsequently make it possible to declare no involvement in the management database;
3) since management accounting reflects all key business processes, its logic will be imposed on the vast majority of employees, and not just from the "inner circle" who become unwitting witnesses to "double" accounting, without even knowing about it.
Next, there is a risk of applying the norms of paragraphs. 7 p. 1 art. 31 of the Tax Code of the Russian Federation, which states that in the case of "... accounting in violation of the established procedure, which led to the inability to calculate taxes ..., the tax authority has the right to determine the amount of taxes ... by calculation on the basis of the information available to them about the taxpayer ...". Do tax authorities go this way in practice? Yes. Here are the real cases.
An extra charge of almost 1 billion rubles to the restaurants of the Korchma Taras Bulba network based on the management base seized by the OEBiPK operatives (cases Nos. A40-249895 / 2015, A40-149661 / 2016, A40-147483 / 2016 and others). The tax authority presented the following evidence, which convinced the court that the data of the seized Excel tables reflect the real business activity:
1. testimony of a financial analyst who worked for 3.5 months and disclosed the entire management accounting scheme;
2. The instructions for maintaining restaurant tables were removed;
3. testimonies of restaurant directors, chief accountants of restaurants, a former lawyer of the management company on the reporting procedure for real revenue (over ten people in total);
4. testimonies of the chief accountant of the management company about a group of people who at night rolled up cash desks and took unaccounted-for proceeds to bank cells (here I will add a comment: management accounting is not only an array of information, but also a control procedure, because the information must be accurate; therefore, unaccounted for revenue within the framework of management accounting procedures should be regularly checked with management reporting, and these are additional witnesses).
5. testimony of the head of the personnel department of the management company;
6. The data in the management accounts completely coincided with the regulatory reporting regarding non-cash payments - payment by card in a restaurant - and always differed to a greater extent in terms of cash (which immediately refuted the taxpayer’s argument that it was plans for the year and not execution )
All instances supported the tax authority in the dispute.
Case No. A46 / 943-2013. The case ended in favor of the taxpayer. The tax authority received cash flow reports seized by law enforcement agencies (the amount of income in them exceeded the income from the tax reports submitted), signed by a certain person. The examination showed that some of the signatures belong to the director of the taxpayer, and some to other existing employees. Based on the examination, the tax authority accepted these reports for tax reporting (it is not clear what they were guided by) and charged taxes on them. The taxpayer said in court that the seized financial statements do not meet the criteria for the primary accounting documents (Article 9 129-FZ “On Accounting”), therefore it is not possible to charge taxes on the basis of it. The court agreed with him. The case is characterized by the fact that the court noted: “In this case, having reasonable ... doubts about the applicant's proper observance of the established accounting procedure (the company has“ double ”accounting), the Inspectorate should be guided by the provisions of subparagraph 7 of paragraph 1 of Article 31 of the Tax Code of the Russian Federation and, bearing in mind the data contained in the monthly cash flow statements ... drawn up (signed) by the manager ... and other responsible employees ... calculate taxes not arbitrarily, but as permitted by law etnym way - on the basis of information it has about the taxpayer. " The appeal and cassation made similar conclusions. The courts directly confirmed my assumption about the legal consequences of “double” accounting.
Case No. A28-747 / 2014. In this case, there was no additional charge directly according to management accounting. The taxpayer was considered unreasonable tax benefit on transactions with one-day firms. The tax authority cited a standard invoice for such cases: nominal management, absence at the legal address, signatures on invoices made by unidentified persons, and so on. Maintaining “double” accounting was only one of the evidence. The taxpayer conducted accounting in 1C and management accounting in Axapta. In this case, one detail is interesting. The scheme of “double” accounting and the procedure for the formation of unreliable tax reporting in their testimony outlined the former chief accountant of the company. Naturally, the entire current financial department in the amount of four people showed that there is no “double" accounting, it stipulates. The court was convinced by the testimony of another employee who had nothing to do with the formation of tax reporting. The warehouse manager showed that the posting of goods in the warehouse was based on the factory article numbers. Accounting for them was carried out in the Axapta database, but in the regulatory framework 1C these articles were not. These are the very details of key business processes, without which management accounting will not be objective, and this is the main problem to hide its existence. The warehouse manager did not participate in the creation of a fictitious workflow and she was not prepared for interrogation. But its factual details confirmed the testimony of the former chief accountant.
Case No. A65-14309 / 2012. Corporate conflict. This is not tax, but business security. One of the participants of LLC (Victim) suspected the co-founder, who is the director, of abuse. To protect his rights, he turned to law enforcement agencies. Operational actions of the police made difficulties in the operation of the LLC and other participants filed a lawsuit to expel the Victim from the list of participants on the basis that it makes it impossible for the company to operate or significantly complicates it (Article 10 of the Federal Law “On LLC”). The victim in court was saved by the fact that the investigators identified “double” bookkeeping in LLC. From which data on multimillion-dollar off-balance sheet cash flow became known. This convinced the court that the victim actually acted in order to protect his rights and legitimate interests. The lawsuit was denied, despite the fact that at the time of the arbitration proceedings the victim was also denied a criminal case.
From an analysis of practice, we see that:
● tax authorities are willing to interpret taxpayer management reporting, and law enforcement agencies are actively finding and seizing it;
● tax authorities have legal capabilities recognized by the courts to use management accounts to calculate tax liabilities;
● “arrive” can not only from former employees, but also from “former” partners who can use the facts of conducting “double” bookkeeping known to them as a confirmation of violation of their rights and legitimate interests.
An analysis of arbitration practice also refutes the prevailing opinion among entrepreneurs. It is believed that if you securely hide the management base, then nothing will happen. For example, place it on a server abroad and make a panic button, clicking on it instantly disables access, archives the data, sends it to a secret address and destroys the database. Exactly such a service provides one well-known application for management accounting. But not so simple.
The tax authority needs to carry out a two-step approach: first, prove that there are prerequisites to consider the regulatory accounting invalid, in order to get reasons to apply subparagraphs. 7 p. 1 art. 31 of the Tax Code of the Russian Federation; the second step is to calculate the tax using available information about the taxpayer, as well as data on other similar taxpayers.
For the first step, the presence of the base itself is optional, moreover, its presence is not crucial for the court. The tax authority uses other evidence for this purpose: testimonies of witnesses about the peculiarities of recording objects in kind, testimonies on the procedure for reporting, use of articles and codes in regulatory accounting, instructions on internal accounting, the procedure for implementing control measures and other details that are not clicked on hide it.
The base would be useful in the second step, but I’m sure that even if it doesn’t exist, the tax authority will find how to calculate the tax, the code does not limit them much in this. And it is not a fact that the tax calculated in this way will be lower than if the tax authorities used the accounting base for additional charges.
3. How to put a secure account?
If the share of “artificial” workflow is high in business, it is unlikely to get rid of “double” accounting. But in this case there is no point in thinking about accounting security, because tax risks are already very high. A fictitious workflow will almost certainly be challenged by a tax authority in court. The correct path to business security is this:
1) Business risk analysis.
2) Tax and management planning.
3) Business process reengineering.
4) Business restructuring.
If the last two points are fulfilled in a coordinated manner and bring legal entities closer to real business processes - management accounting can be put on the data of routine reporting.
I will show how to do this with a simple example. Suppose, LLC “Moth” decided not to work with one-day firms and structure its business to reduce tax risks. To optimize taxes and cash out money, it was decided to use the design of the managing director of the IP, as the amounts did not exceed 400 thousand rubles per month. How to do it right?
1) First an analysis. Why do we need cash? A common situation: salary supplement in envelopes and kickbacks to customers. Salary costs are a fixed amount of 200 thousand rubles per month (plus or minus due to vacations and sick leave), kickbacks make up 2% of the turnover.
2) We give outsourcing of IP maintenance, amounting to about 3 thousand rubles per month. A cheap solution, but solves a bunch of problems to reduce risks. The contract with the IP manager will include payment of two types: fixed, for the performance of current duties; bonus as a percentage of sales. We plan the expenses of individual entrepreneurs: maintenance - 3 thousand rubles per month, cash settlement services - 1,500 rubles, taxes 6% of turnover. Based on the amounts received, we calculate the tariffs for the contract: a fixed payment of 216,770 (this is 200 + 3 + 1.5 + 6%), a bonus of 2.13% (2% / 0.94) of sales.
3) In the case of the transfer of the director to IP, reengineering is not required (but a business goal is required, this is another big topic).
4) We attract competent lawyers who make up a verified agreement with the manager. We write in the accounting policy that the fixed costs are credited to account 26 (“General business expenses”), and the sales bonus to 44 accounts (“business expenses”). On accounts 26 and 44, the analytics is the item of expenses. If desired, you can create special articles for these expenses directly in accounting. For example, “sales bonus U” and “pay fixed U”. “U” means manager, although we understand that this is a sign of cash flow. We make changes to the register, we begin to work.
As a result of this restructuring, all signs of “double” accounting have been eliminated.
1) All transactions are reflected with the same purpose as in the contract, and in the primary accounting documents. For payments, it is not necessary to set up a transit operation in the controlled IP, unlike the “traditional” accounting.
2) Accounting does not contain transactions that are not documented. Cash transactions are recorded in regulatory accounting. Despite the fact that they are slightly overstated by the costs of IE for cashing, from a managerial point of view, these are inseparable costs.
3) Accounting is carried out in the context of legal entities, which is an additional confirmation that these are independent business entities.
This simple example is shown only to show that the problem of avoiding double counting is completely solvable. There are no universal recipes, each individual case requires an individual approach, as, in fact, structuring the business as a whole.
In the event that your litigation or other dispute, contractual work or any other form of activity concerns the issues discussed in this or our other material, we recommend checking and making sure that your legal position complies with the latest changes in practice and legislation.
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Kirill Soppa, partner. I am writing articles, looking for interesting information and suggest ways of its practical use. I believe that thanks to high-quality legal analytics, clients come to a law firm, and not vice versa. Do you agree? Then let's be friends on Facebook.
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