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Finance and Credit
 

Low profitability threshold and field audits

Vol. 21, Iss. 12, MARCH 2015

PDF  Article PDF Version

Available online: 22 March 2015

Subject Heading: FISCAL SYSTEM

JEL Classification: 

Pages: 49-54

Afanasenko A.N. Kuban State Agrarian University, Krasnodar, Russian Federation
nastena230188mail.ru

Subject Given the fact that many organizations misrepresent financial and economic performance data striving for incomplete reporting of their commercial activity results to pay less tax or avoid taxes entirely, this particular problem is relevant.
     Objectives The objective of the article is to consider changes in the concept of field audit planning due to emergence of the industry average indicators of taxpayers' activity for 2013. If taxpayers fit the existing criteria and run business with profit, the risk of field tax audit will significantly decrease.
     Methods I used econometric methods to analyze the level of profitability and tax burden by various sectors of economy, as these indicators provide evidence of financial conditions of any organization.
     Results I have identified the areas of activity, where field tax audits are most probable.
     Conclusions and Relevance Based on the research results, I conclude that profitability of sales and profitability of assets increased in the hotels and restaurants sector but decreased in wholesale trade. Both indicators went up in retail trade and in the sphere of personal services. The industry average indicators of tax burden grew in construction, in the majority of manufacture and trade enterprises, but decreased in transport and in the hotels and restaurants sector. In general, the profitability of sold goods, works, and services in Russian organizations for 2013 decreased, as well as the assets profitability. In 2012, it was 9.7% for sold goods, works and services, and in 2013, the figure was 7.7%, for assets - 6.8% and 5% respectively. Thus, it is possible to assume that if the trends persist, the probability of field tax audits of retail sale enterprises will increase.

Keywords: tax audit, profitability, tax burden

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