The main difficulties for foreigners in Russia understanding the expense reporting rules
The main problem for foreign employees in Russia is that they do not understand the need in expense reporting for all these paper documents and, that these documents need to be drawn up correctly. And sometimes it can turn out the employee owes money to the company for missing or incorrect documents.
The accounting rules in Russia differ from many countries, especially western accounting principles. In Russia an expense must be documented and can not be deducted if the expense was factually incurred but is not correctly documented. All expenses and revenue are not booked at the time they were incurred but at the time they were documented.
As an example. The company transferred to the employee funds on March 29th to purchase hardware for support an equipment installation at a customer. The employee hands over the documents of what he has bought on April 1st. The responsible person approves the expense report right away. The expenses will be now counted for April 1st , and booked in the second quarter rather than the first quarter when the hardware was bought.
In order to be able to use a document to increase expenses and lower the profit taxes a document must be available as original. Copies can not be used for tax deductability purposes. And certain documents need to contain special information, such as e.g. a taxi receipt or a restaurant bill. You can read more here. Business trips and confirming documents are another specific topic.
There is additional information needed to be document as well, e.g. who was at the restaurant for what business reason, where did the taxi drive from and to, and who received the gifts bought. All this is not needed because the accountant just wants to know it but in order to prepare a number of internal documents showing the tax inspection that the funds were necessary for the business.
There are also situations when an employee goes on a business trip and all tickets, hotels and etc. are paid by the company and the employee pays nothing by himself. And then the accountant tells the employee that according to the accounting program he owns the company money because all the expenses were purchased but he was officially not on a business trip. And this because the employee did not hand in the traveling documentation,such as an airline ticket stup or a print out of the electronic ticket. When all the necessary documents are handed in to the accountant the trip is closed and the “debt” as well.
In order to better understand the principles of Russian accounting system and have the information about the documents needed at hand, a company can create a user manual /travel policy for the foreign employees, including the list of what documents are needed for the accounting department.