On taxes and other obligatory payments to the budget (Tax Code)

Article 160. General provisions

1. In case of violation of the accounting procedure, loss or destruction of accounting records, tax authorities identify taxable and (or) tax-related items using indirect methods (assets, liabilities, turnover, costs, expenses) in accordance with the procedure set forth in this article and Articles 161, 162 and 163 of this Code.

2. The violation of the accounting procedure, loss or destruction of accounting records are understood to mean the absence of or the taxpayer’s (tax agent’s) failure to produce documents, providing a basis for identification of taxable and (or) tax-related items to calculate tax obligations, which are requested pursuant to tax authorities’ orders in accordance with Article 161 of this Code.

3. Indirect methods of identifying taxable and (or) tax-related items are understood to mean the determination of an amount of taxes and payments to the budget on the basis of the valuation of assets, liabilities, turnover, expenses, as well as valuation of other taxable and (or) tax-related items taken into consideration for the calculation of a tax obligation for a specific tax and payment to the budget in accordance with this Code. Taxable and (or) tax-related items are appraised on the basis of information received from tax returns and (or) primary accounting documents, as well as from other sources.
Article 161. Tax audits in case of absence of accounting and other documents (information)

If in the course of a tax audit, a taxpayer (tax agent) fails to produce all or part of the documents required for identification of taxable and (or) tax-related items, it is mandatory to deliver the taxpayer (tax agent) a tax authority’s request for the submission or restoration of the said documents, as well as a notification of tax audit suspension.

The tax authority’s request is subject to execution within thirty business days from the day following the delivery of the request to the taxpayer (tax agent).

A taxpayer (tax agent) who failed to submit documents required by the tax authority to identify taxable and (or) tax-related items must give a written explanation of reasons for the failure to submit the said documents.