How to defend your bank transactions in the tax affairs organization
You may be among the people who were or will be called to the tax affairs organization for bank transactions. It is natural that you should be able to have sufficient and correct justification for your bank transactions, but the fact is that convincing the tax department is not an easy task at all.
In order to successfully pass your tax file through the tax office, you must have sufficient knowledge and mastery of tax laws and regulations, and have sufficient experience in this field. Obviously, such an assumption is completely unacceptable for an ordinary person. The best way to do this is to consult a competent tax advisor.
Perhaps the tax consultant alone cannot cope with this task, because the deposits are to your personal account and it is necessary to prepare the bill from the consultant’s area, and to explain to the consultant about the transactions, including the deposits.
The hard work even for the consultant will be deposit transactions to the bank account connected to the card reader, of course, deposit through the card reader and not cash deposits or transfers to these types of accounts, because reasons can be found for these deposits. Although depositing through a card reader can also be done by re-examining each of the deposit transactions, a way can be found to eliminate it in determining the tax status.
Among the transactions that do not have an income nature, we can refer to paragraph 9 of the circular 200.99.16:
In the implementation of this clause, matching the transactions with the following items is not relevant and only the overall matching of the amounts is sufficient.
A- Bank transactions that basically do not have an income nature for the account holder, such as:
– Bank transactions related to members of the board of directors and shareholders of legal entities with the approval of the legal entity in question
-Receipt and payment related to charging right
-Receipts and payments to relatives’ accounts (if its income nature is not proven by the tax administration)
-Received banking facilities
-Transfer between personal accounts
-Transfer between accounts of partners in partnership businesses
– Salaries deposited into the account of individuals by the employer with the approval of the relevant employer.
– Receipts and payments of shareholders and members of the board of directors of legal entities whose counterparty is specified in the accounts receivable and payable (current partners) in the legal entity’s offices.
Loans and deposits received and paid
– Funds received from compensation
– A transfer between bank accounts of individuals if it is not related to income
– Amounts received and paid by individuals as an intermediary according to the business environment of natural persons (if its income nature is not proven by the Tax Administration)
B- Bank transactions that are income in nature, but are exempt from paying tax or subject to flat tax or zero rate tax or tax deducted at source.
In line with the implementation of this paragraph, the mere non-matching of Rial to Rial amounts cannot be the basis for not accepting Modi’s written statements regarding the aforementioned activities.
C- Bank transactions that have an income nature but have already been included in the tax calculation.
T- Bank transactions that are not included in the above classes A, B and C should be handled according to other clauses of this circular.
preparation and adjustment:
Arash Mouszadeh Haghigi
Tax Press/Tax Updates
This post is written by Academyaccounting