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Suspicious and unusual transactions will have to be reported

During State Secretaries' meeting, the draft amendments to the Law "On Taxes and Duties" (Tax Law) were submitted for the review providing taxpayer’s obligation to report suspicious and unusual transactions in the field of taxation related to business partners and customers to the State Revenue Service (SRS). In view of the bill authors, it will improve work efficiency of SRS in prevention and detection of infringement tax matters. 

As of 1 April 2016, as per Tax Law, Article 22.2, Paragraph 3, it is already foreseen that banks and payment service providers have to report suspicious or unusual transactions of customers to SRS. Herewith some examples i.e., apparent changes in customer's account balance (increased turnover etc.), tax evasion, unusual and complex transactions lacking clear economic or legal purpose, the customer has unusually large amount of the transactions, suspicious transactions with electronic money etc.

From 1 January 2017 in accordance with the draft amendments other entities including tax consultants, outsourced accountants, certified auditors and audit firms, sworn notaries, sworn lawyers and other persons referred in the Article 3 of the Law of the Money laundering and terrorism financing will have to report information to SRS about suspicious and unusual transactions as per the Tax Law statutory requirements.

An obligation of the taxpayers to provide information to the SRS in case of client’s unusual and suspicious transactions was foreseen in the shadow economy combating plan. Thus, further progress of the draft law and the approval of it by the Parliament can be certainly forecasted. Consequently, entities of the aforementioned money laundering and terrorism financing law should set criteria to be able to classify customer transaction as typical or atypical, complex or suspicious to meet the requirements of the Tax Law starting from next year.


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