Specifics of procedure of integrity assessment of a design company's counterparties for export VAT calculation

The article presents the results of a study on the assessment procedure of counterparty integrity, which helps to determine the reliability and legal status of any involved contractors. The argument rests on the methods of system and institutional analysis, economic analysis of business operations, and comprehensive legal analysis of entrepreneurial operations. Relevance of the study consists in the theoretical and practical importance of efficient subcontractor management, as well as in the need of an engineering design company to establish a unified procedure for dealing with partners. The procedure of integrity assessment of counterparties (suppliers, subcontractors) of a design company includes some economic and legal techniques. Design companies use the counterparty integrity concept in verifying whether the value added tax on exports is computed correctly, whether the VAT refund (deduction) is justified, and whether the procurement of some works, services and commodities is economically reasonable. Verification of the physical existence of a counterparty and the authority of persons who sign contracts and issue letters of authorization is also provided. In contrast to existing verification methods, the approach used in this article allows choosing the best way to deal with international partners. Additional measures to disclose unfair practices of partners by means of a legal review of counterparty documents are developed. The article presents a tested form of reporting of counterparty negotiations. A set of measures for a detailed counterparty verification allows systematizing the procedure of integrity assessment of counterparties (suppliers, subcontractors) of a design company. The procedure and measures suggested in the paper will help design companies reduce their business risks.