Sly American Trick. (see also US Ambassador comes to Novosibirsk for Pervomaisky businessman.)
A method spread in business and public catering to conceal taxes by registering a business in Sole Proprietor (SP) form became dangerous in Novosibirsk. Last week the OBEP conducted a search of the largest restaurant company in the region, New York Pizza (NYP). In the not too distant future, as "KS" has learned, similar visits will be paid upon other restaurants and retailers.
The makeup of New York Pizza group, which was founded in 1996, includes 8 New York Pizza pizzarias, 5 New York Coffee shops, 3 culinary "Kuzina," the New York Times bar, the New York Diner, the Mayakovsky KKK and the "NVN" night club. The "non-food" project the president of the group, Eric Shogren, an American citizen, is involved in, is furniture production. The turnover and earnings have not been divulged.
Last week agents of the OBEP UVD for Novosibirsk province conducted an unannounced audit of NYP operations, and a search was done on the company's central offices. The GUVD press office was not able to give the details of this operation, but according to law, the OBEP is involved with tax crimes, with the amount of damages exceeding 500,000 rubles.
UMNS director for Novosibirsk region Vladimir Kamyshan verified for "KS" that revenue agencies showed an interest in "some enterprises, who minimuze taxes, which divided up into smaller with transferring them to simplified system of tax payments with basic reduction of tax payments." Mr. Kamyshan declined to name a specific business or a sum of a claim.
NYP representative Evgeniy Golovkov corroborated the fact of of the audit for "NS." He showed surpise at NYP interest in his bookkeeper. "The businesses in our group have various legal forms. However, this is tied not to the amount of tax collection, but to simplify the plan of their payment: decreasing paperwork, maintain the optimum number of employees and so forth," says Evgeniy Golovkov.
As the head of the office of the "Brokerkreditservice" tax consulting company, Sergei Aldokhin, explained to a "KS" correspondent, registering as an SP (sole proprietorship) first gives a business a serious tax advantage. "Sole proprietors pay 13% of their income, while legal corporations pay 24%," says Aldozhin. "Besides that, the combination of SPs and legal corporations, including the simplification of taxation, allows various plans to spring up which, besides optimizing flow of financies, gives rise to the opportunity of decreasing the tax base. But this is not against the law."
"The majority of fast-food places and restaurants operate under the SP plan," says director of the "Sibirsky Yuridichesky Kompani" Sergei Karpekin. "The main thing is for the business to be registered in accordance with legal standards and have a license agreement with the owner of the trademark under which they operate." In the lawyer's opinion, the tax agencies can have a claim on the NYP only in the event of a violation of company standards in classifying a small business as an SP. If the taxpayer does everything according to established standards, then, as Karpekin says, "we won practically every case and recovered the money."
NYP is not the only company that interests the organs of power. According to "KS" information, most large retailers and restaurants that use the SP status to minimuze taxes can, in the near future, expect to be audited. The initiative comes not from the UMNS, but from the regional administration. "In Novosibirsk there are big stores with a huge turnover in which ten employees really work," a source in the UMNS told "KS," "however they are registered as SPs and pay little tax in relation to their real turnover."
However, many companies have already turned down the SP as a form of tax optimization. According to Lyudmila Kozhemyakina (director of the Novosibirsk "Kopilka," "Krepost" and "Kvartal" chain stores and the "7 zvesd" store), her companies were re-registered as corporate entities just a year ago (before which they operated as SPs.) According to her information, this was necessary to make accounting more transparent. "In today's chain stores it's important to have a clear account of operations, for which it's necessary to have a single information base," says Kozhemyakina. "When stores are broken down into separate legal entities, getting information into one spot is very difficult."
Source: Kontinent Sibir
, 27.8.04, Stas Sokolov, Vadim Vorontsov, Yekaterina Khlebnikova