Importance The article highlights the specifics and difference of financial and tax accounting principles in relation to insurance expenses, optimization of insurance risks, involving financial and tax accounting techniques. Objectives The research analyzes principles of financial and tax accounting of insurance expenses and points out their key specifics and difference. We also review basic approaches to accounting of the said expenses, for income tax purposes, and identify accounting weaknesses causing respective tax risks. The research forges corporate methods for accounting of the expenses, considering optimized and increased tax risks, and demonstrates pros and cons of such methods. Methods We reviewed the specifics of financial and tax accounting of insurance expenses through a comparative analysis of relevant legislative regulations. The research also relies upon methods of comparison and analysis, mathematical and statistical methods for assessing tax base and tax payments, financial costs and other indicators. Financial planning helped us evaluate the efficiency of the proposed methods. Results We conducted a comparative analysis of financial and tax accounting principles in relation to expenses under insurance contracts. The expenses were classified for income tax purposes. We also identified the salience of compulsory, voluntary, individual and property insurance plans in Russia and articulated two methods for tax accounting of insurance expenses, models of optimized and increased risk. The article proves it is efficient to use our methods and models and indicates weaknesses and strengths of their application. Conclusions and Relevance We determined tax risks associated with a conflict between the civil and tax laws concerning insurance contracts, thus leading to recurring tax and arbitration disputes. The article proposes amendments to the effective clauses of the civil and tax laws to form single, systematized principles of tax accounting of expenses under insurance contracts.
Keywords: compulsory insurance, voluntary insurance, expenses, tax risk, income tax
References:
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