The draft federal law On Amendments to Part 1 of the Tax Code of the Russian Federation and Article 1 of the Federal Law On the Protection of the Rights of Legal Entities and Individual Entrepreneurs with regard to State Control (Oversight) and Municipal Control and on the Repealing of Certain Provisions of Russia’s Legislative Acts in connection with the Improvement of Control over the Compliance of Banks with Russia’s Tax Laws was prepared by the Ministry of Finance in accordance with Paragraph 1 of the action plan to improve the legal and regulatory framework aimed at combating tax evasion, which was approved by the Government’s Directive No. 2250-r of December 3, 2012.

The draft law is aimed at creating a legal framework for tax authorities’ supervision over the compliance of banks with their obligations under Russian tax laws.

To these ends, the draft law proposes to carry out on-site audits within the premises of banks, as well as desk audits on the grounds of tax authorities.

These audits are aimed at inspecting banks, and not their clients. The creation of a legal framework for regulating the control over the compliance of banks with the aforementioned obligations is intended to ensure that the tax authorities have the necessary powers, while guaranteeing that the rights of banks are protected.

On the whole, the proposed procedures for inspecting banks are in line with the current provisions of Russia’s Tax Code, which regulates procedures for on-site tax inspections (Article 89).

The draft law will be reviewed at a Government meeting.