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Taxes and Taxation
Reference:

Analysis of the practical implementation of the mechanism of unaccountable form of VAT calculation

Palamarchuk Oleg Olegovich

Leading Expert Specialist, Federal Tax Service

23 Neglinnaya str., Moscow, 127321, Russia

olegpalalamar17@yandex.ru
Other publications by this author
 

 

DOI:

10.7256/2454-065X.2024.2.69968

EDN:

JRRVUG

Received:

26-02-2024


Published:

18-03-2024


Abstract: In the author's scientific article "The need and prerequisites for conducting an unaccountable form of VAT calculation", potential opportunities for the practical application of a new concept of VAT calculation, the essence of which is to simplify the calculation procedure, consisting in the abolition of a number of requirements, rules and procedures. The tax authorities will only issue electronic invoices, according to which the authorities will calculate the tax automatically. The new concept will entail a change in the procedure for calculating tax and its administration, which may lead to incorrect calculation of tax and may cause an increase in shortfall in state revenues, which requires a preliminary calculation of such losses. Since there are many rules and benefits, losses can be obtained from each such factor, which requires an analysis of state revenues for each article. The purpose of this work is to identify VAT transactions with the maximum risk of incorrect calculation of VAT by the tax authority on the invoice. The main conclusion in this work is the presence of risks of incorrect filling of the taxpayer's invoice and calculation of tax by the tax authority at the level of 30%, which is explained by the fact that about 70% of invoices do not contain features and subtleties, but are compiled as a general rule in the form of applying a tax rate of 20% to each sale according to the corresponding the invoice. However, these risks can be minimized by minor revision of the invoice without significant addition of new details, since each additional detail entails the risk of incorrect filling in, which increases the likelihood of erroneous registration of the document.


Keywords:

VAT, tax, tax return, tax amount, tax base, tax deductions, tax recovery, taxable transactions, VAT exemption, tax benefits

This article is automatically translated.

Introduction.

The relevance of this work lies in the fact that the concept of the current tax calculation procedure was introduced in the last century and is aimed at calculating the tax by the taxpayer, followed by the preparation and filing of a tax return. Modern technologies raise the question of the effectiveness of the tax calculation procedure in a new way, and also make it possible to shift this function to the fiscal authorities. In this regard, the author in the previous article proposed the concept of an unaccountable form of VAT calculation [1], the essence of which was as follows: to amend the tax legislation, according to which the VAT tax declaration is canceled (along with the purchase book and sales book, journals of invoices issued and received), the functions of calculating the tax are transferred tax authorities, and taxpayers are required to issue invoices, regardless of whether the relevant sale is taxed or not (if the sale is not taxed, then a mark "Without tax" is affixed). Invoicing will be carried out only through electronic document management operators, who will automatically transfer these documents to the tax authorities for their calculation of tax and issue a notification of tax payment to the taxpayer with an attached calculation of the amount of calculated VAT.

This approach has the following advantages over the current tax calculation procedure:

1. It will save business from the need to comply with frequently changing legislation, as well as comply with a large amount of current regulations;

2. Reduce the risks of VAT evasion [6];

3. The invoice will replace the primary documents (invoices for payment, acts of work performed, invoices) since its revision will allow this document to be supplemented with the function of the primary document. At the same time, replacing the invoice with a universal transfer document (UPD) is impractical since the UPD, as well as the invoice, does not have all the details necessary to take into account all the features of VAT application;

4.     It will allow to cancel the notification of the application of VAT exemption, since the tax authorities will automatically determine the persons who are entitled to apply such an exemption (according to Article 145 of the Tax Code, such exemption is voluntarily applied to persons whose revenue for 3 consecutive months did not exceed 2 million rubles). However, this concept implies the replacement of the right to mandatory exemption from VAT, as it will create the potential for the cancellation of tax returns for other taxes, primarily corporate income tax.

However, the current regulatory framework contains a large amount of norms regulating the procedure for calculating taxes [12, 13], which, in the case of the introduction of a new VAT calculation mechanism, will require taking into account all these norms in the invoice. If the invoice does not take into account all the norms of VAT legislation, this circumstance may lead to incorrect calculation of VAT by the tax authority and, consequently, an increase in shortfall in federal budget revenues. VAT is also one of the main sources of income to the federal budget and the consolidated budget as a whole [1], which requires special attention to the implementation of the proposed concept, since in case of mistakes, the federal budget may lose significant revenues. This fact is confirmed by Figure 1, which shows that VAT has a large share in state revenues [1]. Therefore, the proposed concept requires a preliminary calculation of such losses. Since there are many rules and benefits, losses will be incurred from a variety of factors – each benefit and norm. This requires an analysis of government revenues for each item.

Figure 1. The amount of VAT revenues in the federal and consolidated budget of Russia by year in millions of rubles

Source. Compiled by the author in a previous article based on data from the Ministry of Finance of the Russian Federation [1]

The need for digital transformation is reflected in a variety of scientific papers, including dissertations. For example, in the dissertation for the degree of Candidate of Economic Sciences "Improvement of the VAT tax administration system in the Russian Federation", V. A. Stroiteleva proposed the concept of introducing digital VAT administration. And although the concept proposed in the work relates to a slightly different topic, it confirms the need to revise the current mechanism for calculating VAT [7].

The need to digitalize tax administration in general, that is, not only administration, but also declaration, is being paid attention not only by public authorities, but also by many scientists [14]. Thus, Doctor of Economics S. G. Sinelnikov-Murylev, Candidate of Economics N. S. Milogolov and Candidate of Economics A. Y. Bergerov in a scientific article in 2022 "Digitalization of tax administration in Russia: opportunities and risks" [9] saw technological progress and introduced tax monitoring as the first prerequisites for the introduction of automated tax calculation the stage of digitalization of tax administration. Scientists have also drawn attention to the complexity of tax legislation to such an extent that a large number of value judgments are required for every detail of taxation: what is taxed and what is not, what falls under the benefit and what is not.

At the same time, in a number of countries, including Hungary, the practice of automated tax calculation is being gradually introduced [17, 18], which was discussed in more detail in the previous article [1] and confirms the need for the development of the concept of digital tax calculation by fiscal authorities. Significant progress in this direction in European countries has been made since the introduction of the period of self-isolation [19].

The purpose of this work is to identify VAT transactions with the maximum risk of incorrect calculation of VAT by the tax authority through an invoice received through an electronic document management operator. At the same time, the analysis of the dynamics of various VAT indicators used to identify patterns is not the purpose of this work, but is required to identify transactions with the greatest risk of incorrect VAT calculation by tax authorities, which will allow paying special attention to such types of transactions when developing a mechanism for calculating VAT by tax authorities.

The scientific novelty is the expediency of introducing an unaccountable form of VAT calculation, which is proved in terms of the risks of increasing the shortfall in federal budget revenues (caused by incorrect filling in of an invoice by a taxpayer or calculation of tax by a tax authority on such an invoice), which is explained by the magnitude of the risk of budget losses at the level of 30%, which can be minimized by making changes to tax legislation and finalizing invoices.

The limitation in this work is the lack of a proposed mechanism for calculating taxes, taking into account all the features of Chapters 21 of the Tax Code, since this issue does not relate to the topic of current work and can be continued in the next article.

 

Methodology for analyzing federal budget revenues from VAT

For the purposes of analyzing the total and quantitative indicators of VAT, statistical tax reporting will be used, which is presented in form 1-VAT. This form was approved by the order of the Federal Tax Service of Russia [15] and consists of several sections, as well as appendices. For the purposes of analysis, this work will use the section "VAT" (containing an aggregated tax calculation, which reflects the tax base and the calculated amount of tax in terms of tax rates, as well as deductions and recovery), Appendix 1 (amounts for each tax benefit) and Appendix 2 (amounts for each of the transactions taxed by the rate is 0%).

The 1-VAT report is compiled for different tax periods and at different dates, but has 3 main periods:

1.     As of February 1 of the year – includes VAT amounts calculated for the 4th quarter of the previous year;

2.     As of January 1 of the following year – includes VAT amounts calculated for the 4th quarter of the previous year and 1-3 quarters of the current year;

3.     As of February 1 of the following year - includes VAT amounts calculated for the 4th quarter of the following year;

This report shows the amounts of tax payable for the current year. So, the taxpayer calculates the tax for the 4th quarter of last year and pays it in the 1st quarter of this year. Further, in the 4th quarter of this year, the taxpayer pays for the 3rd quarter of this year, and in the 1st quarter of next year - for the 4th quarter of this year.

Since this work analyzes the calculated amounts of VAT, and not paid, all tables are compiled in the following order: from each indicator of the report for the 1st quarter of last year and 1-3 quarters of this year (report as of February 1 of this year), the corresponding indicator is deducted from accounting for the 4th quarter of last year (report as of 1 January of the following year) and the corresponding indicator for the 4th quarter of the current year is added (report as of February 1 next year). Such calculations are performed on each line of the three specified reports, which turns the report indicators from the amount paid into the calculated amounts.

 

Analysis of federal budget revenues from VAT by types of taxable transactions

         Having dealt with the methodology of compiling the tables used for analysis, it is necessary to proceed to the consideration of VAT indicators. Table 1 shows data on the VAT tax base in thousands of rubles for 2020-2022 in the context of tax rates, which shows that in 2020 the total tax base amounted to 47,370 billion rubles, in 2021 - 56,342,113 billion rubles (by 8,971 billion rubles or 15.92% more compared to last year), and in 2022 - 66,817 billion rubles (10,472 billion or 15.67% more than in 2021). As a result, the total amount of the tax base for the period under review increases annually by more than 15% per year. At the same time, a significant share of the total amount falls on the tax base formed when sold at a tax rate of 20% - 71.28% in 2020, 70.72% in 2021 and 68.76% in 2022. The share of the tax base at the basic rate has been slightly reduced over the period under review. At the same time, the share of the tax base formed during the implementation at a tax rate of 10% decreased from 5.19% in 2020 to 5.14% in 2022, similarly, the share is decreasing from the calculated tax rates. At the same time, a significant increase in the share occurred for advances: from 17.7% in 2020 to 20.21% in 2022, an increase of 5,097 billion rubles or 60%.

         From the presented data, it is concluded that most of the invoices are issued at a tax rate of 20%, which is the simplest and less erroneous way to reflect the amount of tax compared to transactions taxed at a tax rate of 10%, 0%, non-taxable or taxable by a tax agent, commission agent. Consequently, the risks of incorrect invoice preparation apply only to 29% of the amount of invoices issued in 2020, 30% in 2021 and 32% in 2022. In the case of incorrect reflection of settlement rates or other tax rates, the risks are greater.

Table 1

The total VAT tax base in terms of tax rates in millions of rubles for 2020-2022

The amount of the VAT tax base calculated

Line code

Amount 2020

Amount 2021

Amount 2022

when sold at a rate of 10%, million rubles.

1110

2 462 099,919

2 965 556,912

3 439 204,367

when sold at a rate of 10/110, million rubles.

1120

2 589,759

3 129,324

3 343,723

when sold at a rate of 18%, million rubles.

1130

442 152,977

89 720,701

9 706,506

when sold at a rate of 20%, million rubles.

1135

33 766 457,101

39 848 184,896

45 944 820,610

when sold at the rate of 18/118, million rubles.

1140

8 301,941

1 630,181

92,460

when sold at a rate of 20/120, million rubles.

1145

397 566,562

622 176 791

599 003,961

when sold in accordance with paragraph 7 of Article 164 of the Tax Code, million rubles.

1146

2 592,859

2 516,882

2 051 856

when selling goods at retail with a receipt for tax compensation, million rubles.

1147

2 136,678

2 626,904

1 247,273

when performing construction and installation works for own consumption, million rubles.

1150

101 865,981

105 381,047

125 552,526

from the received advances, million rubles.

1160

8 412 422,713

10 581 522,287

13 510 040,893

Total amount for the year, in millions of rubles.

 

47 370 913,733

56 342 113,257

66 817 466,387

Source: compiled by the author on the data of the report 1-VAT [15]

Table 2 shows data on the amount of tax to be restored and payable by the tax agent (including for the sale of raw hides and scrap metal), as well as VAT deductible, which was not deductible when exporting goods due to the lack of supporting documents. From the presented data, it follows that significant amounts of various indicators affecting the calculation of VAT are attributed to the restoration of tax and tax agents. These operations are difficult to automate, since it will be difficult for the tax authority to determine the moment when the invoice will need to be restored and whether the seller is a tax agent or a seller according to the invoice. It is possible to eliminate these points by finalizing the invoice, which will allow you to determine these points. However, adding only additional details will complicate filling out the invoice and increase the risk of making mistakes when filling out, which will lead to incorrect calculation of tax.

Table 2

The amount of VAT payable by different transactions in millions of rubles for 2020-2022

VAT indicators

Line code

Amount 2020

Amount 2021

Amount 2022

The amount of VAT to be restored, million rubles.

1190

1 985 906,810

2 326 310,926

3 184 774,857

The amount of tax payable by tax agents, million rubles.

1200

195 051,977

217 897,502

193 776,259

VAT deductions for incoming VAT, which is not confirmed by documents, million rubles.

1300

12 268,225

15 622,765

39 222,322

Source: compiled by the author on the data of the report 1-VAT [15]

 

The amount of tax deductions in 2020, based on table 4, is 43,429 billion rubles, which is 91.67% of the tax base (47,370 billion rubles, based on table 2). Similar indicators are observed in 2021 – 91.42% and in 2022 – 90.83%. Therefore, the most important thing for the correct calculation of tax is the availability of a function for automatically determining the invoice received by the buyer for its acceptance for deduction. Currently, a taxpayer does not have the obligation to accept an invoice (the amount of incoming tax) for deduction, but has such a right. Replacing the right to an obligation will simplify the calculation procedure, but not every invoice can be claimed for deduction, but only if the activity for which the products were purchased under such an invoice is taxable. According to the invoice, it is impossible to determine for which activity products are purchased according to such a document, and adding such a detail - marking to which activity the purchased goods are sent is also impractical and complicates filling out the document, as well as increases the risks of making mistakes.

Table 3

The amount of calculated VAT in the context of various transactions in millions of rubles for 2020-2022

The amount of VAT calculated when

Line code

Amount 2020

Amount 2021

Amount 2022

Total amount of tax deductions (2000=2100+2200 +

2300), million rubles.

2000

43 429 040,116

51 510 282,494

60 694 921,812

The total amount of incoming VAT (except for exported goods), million rubles.

2100

42 026 175,371

49 919 351,488

58 582 340,334

Deductions for incoming VAT, which is not confirmed by documents, million rubles.

2200

6 059,124

3 256,044

3 794,855

Deductions for incoming VAT, which is confirmed by documents, million rubles.

2300

1 396 805,621

1 587 674,962

2 108 786,623

Source: compiled by the author on the data of the report 1-VAT [15]

           

Based on table 4, the amount of VAT payable to the budget in 2020 amounted to 7.2 trillion rubles (Table 1), in 2019 as a result of an increase in the tax rate from 18% to 20% [2], as well as price increases (not inflation indicated by the Bank of Russia, but price increases for each type of product which makes a significant contribution to the growth of tax revenues), increased by 2 trillion to 9.2 trillion rubles, that is, by 27%. At the same time, federal budget revenues for the same period increased from 18.7 trillion rubles to 25 trillion rubles - by 6.3 trillion rubles or 35%. Consolidated budget revenues for the same period increased from 48 trillion rubles to 53 trillion rubles – by 5 trillion rubles or 25%.

Table 4

The amount of VAT payable by different transactions in millions of rubles for 2020-2022

The amount of VAT calculated

Line code

Amount 2020

Amount 2021

Amount 2022

payable, million rubles.

3100

7 345 795,346

9 008 227,661

11 206 160,639

when providing electronic services to foreign organizations, million rubles.

3110

115 249,492

145 581,397

102 806,115

to be reimbursed, million rubles.

3120

3 010 647,141

3 724 874,227

4 842 065,969

Source: compiled by the author on the data of the report 1-VAT [15]

           

No less important in assessing the risks of implementing the proposed concept is the analysis of the number of tax returns submitted, since each declaration contains a certain number of invoices reflecting different tax rates, different types of transactions and different taxpayers. An error in each invoice can lead to a distortion of the amount of tax payable to the budget. However, the analysis of the number of tax returns is a separate topic that will not fit into the scope of this article.

 

Estimation of the amount of shortfall in federal budget revenues in case of incorrect filling of the invoice and calculation of VAT

                     Since VAT elements, in addition to non-taxable transactions, are also transactions taxed at a tax rate of 0%, for the purpose of assessing the cost risk of incorrect invoice filling (in the case of practical application of the concept of an unaccountable form of VAT calculation), it is advisable to analyze transactions taxed at a tax rate of 0%. Thus, table 5 presents data on the application by taxpayers of benefits by types of transactions provided for in paragraph 2 of Article 146 and paragraphs 2, 3 of Article 149 of the Tax Code. From the presented data, it can be seen that a significant proportion of transactions exempt from VAT account for loans in the financial market (a quarter of all exempt transactions), the gratuitous transfer of residential buildings, the attraction of deposits by banks, the sale of religious items, as well as services provided in electronic form. Thus, special attention should be paid to preferential transactions when developing the proposed concept, since incorrect reflection may lead to erroneous tax calculation. Significant amounts of benefits are provided for services provided in electronic form, which will also require revision of the invoice, which is necessary for the correct calculation of tax on the invoice. In addition, there is an increase in the amount of benefits applied [3], which also occurred in earlier years, such as 2016 [4].

                     It is important to note that the increase in the tax benefits applied may also lead to a complication of tax control, which has been noticed by many scientists [5][6]. In addition, the Russian Ministry of Finance also drew attention to the significant increase in the benefits applied, despite the fact that its task is to maximize state revenues [16].

Table 5

The amount of VAT payable in the absence of benefits by type of transactions (top 15 and others) in millions of rubles for 2020-2023

Article of the Tax Code

Operation code

The amount for 2020

The amount for 2021

The amount for 2022

149.3.15 (loans for

financial market), million rubles.

1010292

351 723,035

968 057,304

11 315 533,770

146.2.1.(gratuitous

transfer of residential buildings), million rubles.

1010801

0,000

2 564 252,395

4 506 289,694

149.3.3 (attraction

deposits of individuals), million rubles.

1010276

1 d115 034.948

1 508 195,525

1 381 065,939

149.2.12 (sale

shares in the authorized capital), million rubles.

1010243

1 300 334,041

1 825 390,818

959 736,374

149.3.7 (insurance services), million rubles.

1010282

385 910,243

819 497,410

583 805,968

149.2.2 (medical services

- treatment), million rubles.

1010211

166 020,257

376 466,992

228 780,136

149.3.22 (implementation

residential buildings), million rubles.

1010298

91 621,391

203 772,624

121 194,208

149.3.26 (assignment

the rights of the creditor's claim), million rubles.

1010258

57 117,105

256 272,063

120 265,385

149.3.23.1 (developer's services), million rubles.

1010270

62 002,795

130 606,801

114 671,178

149.3.16 (R&D), million rubles.

1010294

96 736,909

149 549,542

111 076,716

149.2.28 (gambling services), million rubles.

1010226

35 011,899

104 870,199

106 330,096

149.2.1 (sale

medical products), million rubles.

1010204

85 701,924

127 334,425

97 580,038

149.3.3.1 (realization of objects

for religious purposes), million rubles.

1010277

55 044,020

115 446,345

83 534,480

149.2.26 (electronic services), million rubles.

1010256

65 856,068

77 554,573

78 976,970

Other, million rubles.

 

3 868 114,635

9 227 267,016

19 808 840,952

In total, in millions of rubles.

8 056 767,942

19 572 340,761

40 162 006,940

Source: compiled by the author on the data of the report 1-VAT [15]

Table 6 shows data on the amount of VAT deductions taxed at the 0% tax rate. It follows from the table that more than 50% of such deductions are for the export of goods and more than 12% for imports, as well as 9% for the re-export of goods (export of previously imported goods). Also, a significant share is accounted for by operations within the country, but taxed at such a rate. During the period under review, the amount of tax deductions attributable to the 0% tax rate increased from 1,477 billion rubles to 2,626 billion rubles – by 1,149 billion rubles or 43.76% of interest. However, in 2022 there was a significant reduction to 1,937 billion rubles – by 687 billion rubles or 26.19%, which is explained by the foreign policy situation. In general, foreign trade turnover subject to VAT accounts for insignificant amounts of tax deductions: 3.40% in 2020 (the percentage of the amount in the "Total" line and the total amount of tax deductions from Table 4), 5.09% in 2021 and 3.19% in 2022. In addition, export transactions account for a smaller amount, but a larger amount, which also reduces the risk due to the fewer transactions required for the preparation of invoices.

Table 6

Dynamics of the value of VAT deductions for exports by type of operations (top 15 and others) in millions of rubles for the period 2020-2022

Articles of the Tax Code

Operation code

Deductions 2020

Deductions 2021

Deductions 2022

164.1.1 (export of goods), million rubles.

1011422

684 083,150

1 235 292,704

994 101,564

164.1.1 (import of goods), million rubles.

1011425

178 552,830

310 069,302

225 607,769

164.1.1 (re-export of goods), million rubles.

1011410

120 388,418

213 588,528

144 044,485

164.1.2.2 (transportation

oil), million rubles.

1010428

70 368,694

124 765,245

87 727,177

164.1.9 (transportation in Russia

by railway), million rubles.

1010443

54 967,072

91 743,274

64 667,488

164.1.6 (sale of drugs metals),

million rubles.

1010411

50 510,203

88 700,742

40 791,304

164.1.8 (import of supplies), million rubles.

1010442

31 873,334

58 024,837

35 909,640

164.1.9.3 (internal

transportation by railway

long-distance travel), million rubles.

1011419

30 002,052

52 467,336

36 423,075

164.1.2.1 (international transportation

goods), million rubles.

1010425

26 573,615

47 067,876

39 913,046

164.1.4 (international

transportation of passengers), million rubles.

1010408

22 820,500

41 969,903

25 622,266

164.1.2.7 (delivery

cargo), million rubles.

1010435

18 095,127

32 182,765

22 045,871

164.1.9.2 (internal

transportation by railway

suburban route), million rubles.

1011417

16 392,744

30 829,689

17 889,593

164.1.4.2 (domestic transportation

passengers on airplanes), million rubles.

1011445

15 818,026

28 263,375

20 350,429

Other, million rubles.

 

115 929,982

200 166,517

134 973,534

In total, in millions of rubles.

1 477 135,081

2 626 640,761

1 938 704,463

Source: compiled by the author on the data of the report 1-VAT [15]

Figure 2 shows that the largest amounts of non-taxable transactions fall on loans in the financial market, transactions for the gratuitous transfer of residential buildings, the restoration of VAT, attracting deposits, as well as the export of goods. However, the analysis itself does not relate to the topic of this article and is carried out in order to determine the operations that should be paid special attention to when building the concept of an unaccountable form of VAT calculation, which is explained as follows: if for a certain operation the amount of VAT is, for example, one ruble, and for another, for example, one billion rubles, then in case of incorrect filling of the invoice for the first transaction or incorrect calculation of tax by the tax authority for such an operation, the budget will lose one ruble, and in the second case - one billion rubles. Thus, special attention should be paid to the procedure for filling out an invoice for the provision of financial services, the gratuitous transfer of residential buildings, the restoration of VAT, attracting deposits, as well as the export of goods.

Figure 2. Dynamics of the amount of VAT payable to the budget in the absence of exemption

from taxation for 2020-2022 in millions of rubles.

Source. Compiled by the author on the data of the report 1-VAT [15]

        

Conclusions and further directions of research

Thus, taxpayers during the tax period make up a significant number of invoices, about 70% of which contain transactions taxed at a tax rate of 20%, which reduces the risks of incorrect filling of the invoice, affecting the correctness of the calculation of tax by the tax authority, At the same time, the taxpayer does not have the obligation to accept the invoice (the amount of incoming tax deductible), but has the right to do so. Replacing the right to an obligation will simplify the calculation procedure, but not every invoice can be claimed for deduction, but only if the activity for which the products were purchased under such an invoice is taxable. According to the invoice, it is impossible to determine for which activity products are purchased according to such a document, and adding such a detail - marking to which activity the purchased goods are sent is also impractical and complicates filling out the document, as well as increases the risks of making mistakes. These circumstances indicate a significant variety of types of transactions and features reflected in the VAT declaration. These features complicate the introduction of unaccountable VAT, since it will be difficult to determine, for example, the moment when the invoice will need to be restored and whether the seller is a tax agent or a simple seller. It is possible to eliminate these points by finalizing the invoice. However, adding only additional details will complicate filling out the invoice and increase the risk of making mistakes when filling out, which will lead to incorrect calculation of tax. Therefore, invoices should contain the ability to automatically determine all the features of tax calculation.

A further area of research may be the detailed development of the procedure for drawing up an invoice and calculating VAT by tax authorities, taking into account all the features of Chapter 21 of the Tax Code.

References
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6. Eremkin, M.A. (2021). Tax control over the calculation and payment of VAT when foreign organizations provide services in electronic form on the territory of the Russian Federation: a legal aspect. Taxes and taxation, 2, 70-84. doi:10.7256/2454-065X.2021.2.35245 Retrieved from https://nbpublish.com/library_read_article.php?id=35245
7. Stroiteleva, V. A. Improvement of the VAT tax administration system in the Russian Federation. Classification for the degree of Candidate of Technical Sciences. Retrieved from https://rsue.ru/avtoref/StroitelevaVA/disser.pdf?ysclid=lrkp3y38e2844905955
8. Nuzhdin R.V., Maslova I.N., Gorkovenko E.V., & Derevenskikh M.N. (2022). Accounting tax policy on value added tax of processing organizations of the agro-industrial complex (AIC). Taxes and taxation, 6, 50-75. doi:10.7256/2454-065X.2022.6.38161 Retrieved from https://nbpublish.com/library_read_article.php?id=38161
9. Sinelnikov-Murylev S. G., Milogolov N. S., & Bergerov A. Yu. (2022). Gaidar Institute of Economic Policy. Digitalization of tax Administration in Russia: Opportunities and risks Economic Policy, 2, 8-33. Retrieved from https://www.iep.ru/ru/publikatcii/publication/tsifrovizatsiya-nalogovogo-administrirovaniya-v-rossii-vozmozhnosti-i-riski.html
10. Milogolov, N.S., & Berberov, A.B. (2017). Analysis of the effectiveness of VAT tax benefits for IT companies. Taxes and taxation, 11, 18-26. doi:10.7256/2454-065X.2017.11.24585 Retrieved from https://e-notabene.ru/ttmag/article_24585.html
11. Bondarev, M.A., & Tipikina, V.A. (2022). Methodology of separate accounting for VAT in the absence of non-taxable transactions. Taxes and taxation, 5, 41-51. doi:10.7256/2454-065X.2022.5.38603 Retrieved from https://nbpublish.com/library_read_article.php?id=38603
12. Vasiliev, S. E. (2021). On the application of the VAT rate in relation to related services. Tax policy and practice, 11, 45-47. Retrieved from https://www.elibrary.ru/item.asp?id=47378058
13. Vasiliev, S. E. (2021). On determining the VAT tax base in respect of subsidies received by the payer in order to compensate for lost income in connection with the provision of a discount by the lessee based on the price of the leased item, including tax. Tax policy and practice, 7, 46-47.
14. Komarova, E. I., & Troyanskaya, M. A. Directions for reforming the procedure for collecting and reimbursing VAT. Retrieved from https://1fin.ru/?id=3278
15. Kravchenko, N. A. (2020). On some aspects of value added tax evasion. Scientific notes of the V. I. Vernadsky Crimean Federal University of Legal Sciences, 4, 268-274. Retrieved from https://sn-law.cfuv.ru/wp-content/uploads/2021/05/Uchenyie-zapiski.-YUristyi----4-2020-276-283.pdf
16. The website of the Russian tax courier. The Federal Tax Service has decided to mark the date for the most free tax. Retrieved from https://www.rnk.ru/news/219650-fns-hochet-otmenit-deklaratsiyu-po-nds
17. Website of the Federal Tax Service of Russia Home page Other functions of the Federal Tax Service of Russia Statistics and analytics. Data on statistical tax reporting forms [Electronic resource]. Retrieved from https://www.nalog.gov.ru/rn77/related_activities/statistics_and_analytics/forms/13366209/
18. Rossiyskaya gazeta (2022). The Ministry of Finance has calculated the cost of tax benefits. Retrieved from https://rg.ru/2022/10/04/rashodnye-chastnosti.html
19. WTS Global. Hungary. (2021). eVAT– What does the new draft eVAT declaration mean for taxpayers? [Electronic resource]. Retrieved from https://wts.com/global/publishing-article/20211206-hungary-vat-nl ~publication-an article?language=ru
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21. VAT calculation. (2022). The second postponement of the submission of pre-filled VAT declarations due to the ongoing crisis with COVID–19; there are no clear plans to set the implementation date [E-resource]. Retrieved from https://www.vatcalc.com/hungary/hungary-delays-evat-pre-filled-returns-again-into-2022

First Peer Review

Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.

The subject of the study. Based on the title, the article should be devoted to the analysis of the practical implementation of the mechanism of the unaccountable form of VAT calculation. The content of the article corresponds to the stated research topic. The research methodology is based on the analysis and synthesis of data on the practical implementation of the mechanism of unaccountable VAT calculation. It is valuable that the author uses a graphical research method in terms of building tables (under which it is recommended to specify data sources). It is also recommended to supplement the article with drawings constructed by the author, which more clearly demonstrate the dynamics of development and structure of the research subjects under consideration. The relevance of the study of issues related to the implementation of an unaccountable form of VAT calculation is beyond doubt, since this tax is one of the key sources of federal budget revenues. Scientific novelty is present in the material submitted for review (in terms of the conclusions that follow from the data in the tables above), but the author has not clearly indicated it. The revision of the article, taking into account the comments indicated in the text of the review, will solve this problem. Style, structure, content. The style of presentation is scientific. The structure of the article is built by the author, which allows to reveal the stated research topic. Familiarization with the content of the article allows us to conclude that the author has analyzed in sufficient detail statistical data on federal budget revenues from the collection of value added tax. It is important to note that the data in the tables is recommended to be presented in rounded form to 3 decimal places with appropriate adjustment of the unit of measurement in the table header. To what extent has the change in the data indicated in the table occurred precisely under the influence of the practical implementation of the unaccountable form of VAT calculation, and not due to the presence of other factors? It would also be interesting to show numerical data estimating the dynamics of the volume of federal budget revenues from VAT collection. It is also necessary to pay attention to the presence of a typo (in particular, the following is indicated: "from which it can be seen that in 2020 the total tax base amounted to 47,370 billion rubles"). It was interesting to know the author's opinion about the existing problems in the application of the unaccountable form of VAT calculation and what does the author propose to solve them? Bibliography. The bibliographic list consists of 7 sources. It is important to note that only 3 of them are scientific publications, which cannot be considered a sufficient elaboration of the methodological basis of the study. The lack of foreign scientific publications is also noteworthy. Appeal to opponents. No scientific discussion was found in the peer-reviewed article. The author is recommended to show what is the increase in scientific knowledge compared to what is contained in other scientific publications devoted to the analysis of the practical implementation of the mechanism of unaccountable VAT calculation. It will also enhance the scientific novelty of the research and increase the relevance of the article to the potential readership. Conclusions, the interest of the readership. Taking into account all of the above, the article will be in demand from the readership interested in value-added taxation issues, as well as the digitalization of the activities of the Federal Tax Service. It seems that the article needs to be finalized according to the comments indicated in the text of the review, after which it can be published.

Second Peer Review

Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.

The Federal Tax Service of the Russian Federation is actively improving and developing tax control and administration mechanisms. One of the first taxes that new practices apply to is VAT. VAT tax administration is highly automated, nevertheless, it is a rather complex tax from the point of view of the calculation and payment mechanism. By now, the Federal Tax Service of the Russian Federation has successfully tested the introduction of an unaccountable form of calculating property taxes and special tax regimes. VAT opens up further prospects for the development of unaccountable tax calculation, their implementation will be a breakthrough stage, given that VAT is one of the key budget-forming taxes. The presented article is devoted to the study of the prerequisites and possibilities of digitalization of VAT tax administration and corresponds to the subject of the journal. The title of the article does not fully correspond to the content, an adjustment is needed. The title focuses on "analysis of the practical implementation of the mechanism ...". At the same time, it is not clear that the mechanism in question has already been implemented, and the analysis of practical implementation presupposes the actual implementation of the mechanism itself. It is probably more correct to add: "analysis of possibilities ...". In addition, the text repeatedly refers to the "proposed concept", but the concept itself, as well as the mechanism for unaccountable VAT calculation, is not described in the article. Therefore, it is necessary to reformulate the title of the article and supplement the text with a description of the concept and mechanism. The article highlights sections that meet the requirements of the journal "Taxes and Taxation". In the "Introduction" the author makes an attempt to substantiate the significance and relevance of the chosen research direction. There are no standard elements for "Conducting" scientific articles. The author needs to supplement the Introduction with such mandatory elements as the purpose, objectives, object and subject of research, and practical significance. In the section "Methodology for analyzing federal budget revenues from VAT", the author examines the algorithm for generating a report on the form of statistical tax reporting of the Federal Tax Service of the Russian Federation "1-VAT". However, the meaning of this section, in the absence of interconnection with other sections, is not clear. The section "Analysis of federal budget revenues from VAT by type of transactions" presents the results of an analysis of the structure of tax revenues of the VAT budget in the context of tax rates and the application of deductions. It is advisable to supplement the presented tables 1-4 with an analysis of dynamics by calculating the growth coefficient or increment. The section "Estimation of the amount of shortfall in income caused by the introduction of a new procedure for calculating VAT" presents the results of calculations of additional tax revenues in the event of cancellation of VAT exemption and application of the 0% rate in accordance with the current conditions of the Tax Code of the Russian Federation. The author concludes that "In the absence of tax exemption for these transactions, VAT revenues would increase by more than 2 times. However, these indicators are reflected in theory, in practice, the abolition of VAT exemption will lead to an increase in the share of tax deductions (since taxpayers will seek to reduce the amount of tax), which will significantly reduce the amount of tax payable. However, this question does not apply to this article." Firstly, it is not clear what kind of analysis of hypothetical additional tax revenues was carried out, why the 0% rate and VAT exemption should be abolished. Secondly, the cited conclusion calls into question the expediency of such an analysis, based on the incorrectness of the hypothesis. Thirdly, the title of the section on falling incomes does not correspond to the conclusion about the growth of tax revenues. In the section "Conclusions and further directions of research", the author has accumulated the results of the conducted research and compared them with the results of research by other scientists. The research uses well-known general scientific methods: analysis, synthesis, comparison, ascent from the abstract to the concrete, logical method, etc. Among the specific methods of economic research, the author applied statistical and coefficient analysis, structure analysis. The chosen research topic is relevant, due to the digital transformation of the economy, which requires the appropriate development of tax administration and control tools. The Federal Tax Service of the Russian Federation is committed to the development of digital tax services, the development and simplification of approaches to tax calculation. At the same time, the relevance of the research and scientific relevance in the article have not been proven and formulated. The article has elements of practical significance, however, they require more detailed study. From the point of view of practical significance, the conducted research is valuable, however, taking into account the shortcomings described above, especially the lack of the proposed concept and mechanism for unaccountable VAT calculation, the lack of interrelation between the presented sections of the article, the lack of justification for their logic and expediency, the practical significance is not clear. The author has not explicitly formulated the scientific novelty of the study. The article should be supplemented with the author's vision of scientific novelty in accordance with the requirements of the journal. The style of the article is scientific and meets the requirements of the journal. At the same time, we emphasize the need to check the text for grammatical and speech errors. For example, only in the "Maintenance" section: "The concept of the current tax administration procedure was introduced in the last century...", "Such an approach outlined in the previous article by the author will save ...", "Therefore, the proposed concept requires a preliminary calculation", etc. The author widely uses elements of visualization of research results – figures, tables and diagrams. The article contains 2 figures and 6 tables. However, the numbers in Figures 1 and 2 need to show the units of measurement. Figure 2 shows the dynamics, however, there are no dynamics indicators, as in Tables 1-4. In addition, according to the text of the section "Introduction", the author refers to table 1 ("from which it can be seen that VAT has a large share in state revenues"), which is missing from the article. The bibliography is presented by 11 sources, which does not meet the requirements of the journal. The bibliography is formed, first of all, by domestic research. There are no foreign studies. The design of the list of references does not meet the requirements of the journal "Taxes and Taxation". The advantages of the article include the following. Firstly, the relevance of the chosen research area. Secondly, the availability of illustrative material. The disadvantages include the following. Firstly, there is a lack of evidence of the relevance of the study, substantiation of its practical significance and scientific novelty. Secondly, there is a lack of appeals to opponents on such an urgent and widely covered topic in scientific periodicals and the business community. Thirdly, bringing the title, the "Introduction", the list of references in line with the requirements of the journal. Fourth, the lack of a description of the proposed concept itself and the mechanism of unaccountable VAT calculation. Fifth, the lack of interrelation between the presented sections of the article, the lack of justification for their logic and expediency, in particular, the calculation of shortfall in tax revenues, as a result of which the author concludes that its potential growth is higher than 2 times. Sixth, the need to eliminate grammatical and speech errors. These shortcomings need to be eliminated. Conclusion. The presented article is devoted to the study of the prerequisites and possibilities of digitalization of VAT tax administration. The article reflects the results of the author's research and may arouse the interest of the readership. The article can be accepted for publication in the journal "Taxes and Taxation" only after the elimination of the comments indicated in the text of this review.

Third Peer Review

Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.

The article is devoted to the study of the possibilities of practical application of the concept of unaccountable form of VAT calculation. The research methodology is based on the analysis of data available in statistical tax reporting, which is presented in the form 1-VAT, the use of a computational and constructive research method, visualization of the results obtained. The authors rightly attribute the relevance of the work to the fact that modern information technologies raise the question of the effectiveness of the procedure for calculating value added tax in a new way, and also allow shifting this function to fiscal authorities. This will help reduce the risks of VAT evasion and relieve businesses from the need to comply with frequently changing legislation. The scientific novelty of the reviewed study, according to the reviewer, consists in the conclusions that for the practical application of the concept of an unaccountable form of VAT calculation, invoices should contain the ability to automatically determine all the features of tax calculation, and the expediency of introducing an unaccountable form of VAT calculation is also shown. The following sections are structurally highlighted in the article: Introduction, Methodology for analyzing federal budget revenues from VAT, Analysis of federal budget revenues from VAT by types of taxable transactions, Assessment of the amount of shortfall in federal budget revenues in case of incorrect filling of the invoice and calculation of VAT, Conclusions and further research directions, Bibliography. The article analyzes the dynamics of VAT revenues in the federal and consolidated budget of Russia in 2017-2022, the total VAT tax base in terms of tax rates for two years, the amount of VAT payable in terms of various transactions, calculations are carried out to determine the amount of shortfall in federal budget revenues in case of incorrect filling of the invoice and calculation of VAT, the dynamics of the value of VAT deductions for exports by type of transactions, it is proposed to pay special attention to the procedure for filling out an invoice for the provision of financial services, the gratuitous transfer of residential buildings, the restoration of VAT, attracting deposits, as well as the export of goods. The bibliographic list includes 21 sources – scientific publications on the topic of the article, as well as official documents and Internet resources to which there are address links in the text confirming the existence of an appeal to opponents. Of the shortcomings that need to be eliminated, it should be noted that tables 2 and 4 have the same names. The article reflects the results of the research conducted by the authors, corresponds to the scientific specialty 5.2.4 Finance and the direction of the journal "Taxes and Taxation", contains elements of scientific novelty and practical significance, may arouse interest among readers, it is recommended for publication after consideration by the authors of the reviewer's proposals aimed at improving the article.