Automate your replies to the tax authorities when explaining queries related to XML-format VAT tax returns

Automate your replies to the tax authorities when...

In order to prepare appropriate electronic replies, KPMG has developed a Converter Model that automatically creates replies to request in an XML-based format



We are writing to inform you that the Federal Tax Service’s letter “On recommendations when conducting desk tax audits” of 16.07.2013 № АS-4-2/12705 (hereinafter, letter 12705) has been amended (by letter № ED-4-15/5752 of the Federal Tax Service of 07.04.2015). The new letter establishes revised procedures governing interactions between the authorities and taxpayers when conducting VAT desk tax audits.

In particular, according to cl.3, art.88 of the Tax Code of the Russian Federation, as part of desk tax audits of VAT tax returns, the tax authorities can issue requests for explanations if they uncover errors or inconsistencies in VAT tax returns in relation to underestimations of the amount of VAT payable or to overestimating the amount of VAT declared for recovery.

The tax authorities may send requests for explanations in electronic form via telecommunications channels using an electronic document circulation system (hereinafter, in ‘electronic form’) in XML-file format.

Consequently, taxpayers are obliged:

  • to ensure that they have the ability to receive requests from the tax authorities in the given electronic format, in accordance with p.1, cl.5, art.23 of the Tax Code of the Russian Federation;

  • to submit to the tax authorities notification that they have received requests issued in electronic form within 6 working days from the date on which the request was sent by the tax authorities;

  • to submit the necessary explanations or make appropriate adjustments to their VAT tax return within 5 working days from the date on which the request was received.

For the 1st and 2nd quarters of 2015, the tax authorities issued test requests regarding mistakes uncovered only if they fell into types 1 (record about operation was not identified in a tax return of counterparty) and 4 (probably there is a mistake in a cell a, b, …). However, for the 3rd quarter of 2015 and for future tax periods, requests will be issued regarding all types of mistakes and to all taxpayers which have submitted VAT tax returns which contain errors or inconsistencies.

To submit their replies to the tax authorities’ requests, taxpayers are able to use the recommended newly-created reply forms. These recommended forms, the electronic reply formats, and the order by which things should be filled in are presented in appendices 2.11 to letter 12705. Replies should be sent to the tax authorities accompanied by lists of the submitted documents (the form to use was approved by order № MMV-7-6/465@ of the Federal Tax Service of Russia as of 29.06.2012).

In order to prepare appropriate electronic replies, KPMG has developed a Converter Model that automatically creates replies to request in an XML-based format (hereinafter, the Converter Model). This is an automated electronic program that processes requests from the tax authorities and generates replies in electronic form to be submitted to the tax authorities.

The advantages in our Converter Model are that it:

  • Automates the reply preparation process to the request, allowing for the time spent on preparing and responding to the request within the prescribed period to be reduced;

  • Works in regularly-used formats using familiar interfaces (MS Excel);

  • Contains internal controls in the Converter Model guaranteeing that data will be processed correctly;

  • Comes with a detailed user manual for the Converter Model;

  • Keeps the accounting system used by the company independent from the electronic reporting system controlling interactions with the tax authorities;

  • Can be used as an internal report by which replies can be prepared via use of its comment feature;

  • Is flexible: the Converter Model allows for forms, designed by your company, to be integrated into its system.

In addition, KPMG would be pleased to assist in improving the business processes behind the creation of replies, integrating these processes with other systems in the company, and automating these reply-preparation processes in ERP-systems.

The Converter Model can save your business time and money: we will be delighted to demonstrate our product’s performance to you and provide additional information. Contact KPMG now to find out more.

© 2022 KPMG. KPMG in Russia refers to JSC “KPMG”, “KPMG” LLC, “KPMG Tax and Advisory” LLC, companies incorporated under the laws of the Russian Federation.  All rights reserved. For more detail about the structure of the KPMG global organization please visit

Connect with us