Very often in culinary recipes you can read something fabulous, for example: “Ah...
![Nut milk Recipes for making nut milk](https://i2.wp.com/vskormi.ru/wp-content/uploads/2014/12/walnuts-and-milk.jpg)
When checking a VAT return, tax inspectors calculate the share of VAT deductions in the total amount of accrued tax. Therefore, before submitting your return, check the safe percentage of VAT deductions in 2018 in your region.
The threshold value for the permissible share of deductions in the total amount of accrued tax is published by the Federal Tax Service quarterly for each region separately. Calculate and check your share to minimize the risk of a tax audit. Tax inspectors will require explanations if the safe percentage of VAT deductions is exceeded.
The table below shows the safe percentage of deductions for the 4th quarter of 2018:
How can you determine if your organization is exceeding a safe value? Here are the step-by-step instructions.
Example
Romashka LLC is located in the Novosibirsk region. The amount of VAT accrued for the last 4 quarters amounted to RUB 2,400,000. The amount of VAT deductions for the same period amounted to 2,250,000 rubles.
Let's determine the specific weight of deductions from Romashka LLC:
2250000 / 2400000 * 100 = 93,75%
In the 3rd quarter of 2017, the share of 90.2% in the Novosibirsk region is safe, which means Romashka LLC is at risk.
If you declare more deductions in your declaration than the Federal Tax Service considers normal, then wait for a request to provide explanations. And under no circumstances ignore it. Penalties for failure to provide a response to tax authorities’ demands:
Once you receive your claim, check your return to see if it correctly reflects the tax-reducing amounts. If the amount of deductions turned out to be overestimated due to an error, submit an updated declaration. If the amounts are reflected correctly, provide an explanation for VAT why the share of input VAT turned out to be higher than the average regional values.
We'll tell you how to reflect deductions in your VAT return using accounting programs.
for the 1st quarter of 2019 and the 4th quarter of 2018
Safe share of VAT deductions
1st quarter of 2019 and 4th quarter of 2018
Safe share of VAT deductions the average for the Russian Federation, according to the Federal Tax Service, is 89.2%.
The share of VAT deductions of an organization is determined by the formula of the Federal Tax Service of the Russian Federation:
Share of deductions by company |
All deductions for the quarter |
The entire amount of accrued VAT |
The result is then compared with the regional value from the table.
If the share of deductions is higher than average, then there is a risk of being subject to an on-site inspection.
To avoid this, Some deductions can be carried forward to the next quarter.
Example
The organization has accrued VAT for the first quarter of 2019 - 2,000,000 rubles, deductions - 1,100,000 rubles. How to determine the share of VAT deductions for the first quarter of 2019?
(RUB 1,100,000 : RUB 2,000,000 x 100%) = 55%
A decree on renaming the Kemerovo region was signed
Now, instead of the name Kemerovo region, the name Kemerovo region - Kuzbass will be used.
Corresponding amendments have been made to the Constitution of the Russian Federation.
(Decree of the President of the Russian Federation dated March 27, 2019 No. 130)
Safe share of VAT deductions for the 1st quarter of 2019
To compare the share of VAT deduction with the safe one, you must first calculate it in your company.
1. First, you need to add up the amount of accrued VAT for the quarter.
2. After this, you need to add up the amounts of deductions for the same period.
Example
The organization is registered in the Belgorod region. Amount of accrued VAT for the 1st quarter of 2019
year - 1,784,354 rub. The amount of deductions for the same period is 989,537 rubles.
The company's share of deductions is 55.5% (989,537: 1,784,354 X 100).
This is below the regional average (89.2%).
Region |
Share of deductions, % |
Belgorod region |
|
Bryansk region |
|
Vladimir region |
|
Voronezh region |
|
Ivanovo region |
|
Kaluga region |
|
Kostroma region |
|
Kursk region |
|
Lipetsk region |
|
Moscow region |
|
Oryol Region |
|
Ryazan Oblast |
|
Smolensk region |
|
Tambov Region |
|
Tver region |
|
Tula region |
|
Yaroslavl region |
|
Moscow city |
|
Republic of Karelia |
|
Komi Republic |
|
Arhangelsk region |
|
Vologda Region |
|
Kaliningrad region |
|
Leningrad region |
|
Murmansk region |
|
Novgorod region |
|
Pskov region |
|
city of St. Petersburg |
|
Nenets Autonomous Okrug |
|
NORTH - CAUCASUS FEDERAL DISTRICT |
|
The Republic of Dagestan |
|
The Republic of Ingushetia |
|
Chechen Republic |
|
Stavropol region |
|
SOUTHERN FEDERAL DISTRICT |
|
Republic of Adygea |
|
Republic of Kalmykia |
|
Republic of Crimea |
|
Krasnodar region |
|
Astrakhan region |
|
Volgograd region |
|
Rostov region |
|
city of Sevastopol |
|
Republic of Bashkortostan |
|
Mari El Republic |
|
The Republic of Mordovia |
|
Republic of Tatarstan |
|
Udmurt republic |
|
Chuvash Republic |
|
Kirov region |
|
Nizhny Novgorod Region |
|
Orenburg region |
|
Penza region |
|
Perm region |
|
Samara Region |
|
Saratov region |
|
Ulyanovsk region |
|
URAL FEDERAL DISTRICT |
|
Kurgan region |
|
Sverdlovsk region |
|
Tyumen region |
|
Chelyabinsk region |
|
Khanty-Mansi Autonomous Okrug - Yugra |
|
Yamalo - Nenets Autonomous Okrug |
|
SIBERIAN FEDERAL DISTRICT |
|
Altai Republic |
|
The Republic of Buryatia |
|
Tyva Republic |
|
The Republic of Khakassia |
|
Altai region |
|
Krasnoyarsk region |
|
Irkutsk region |
|
Kemerovo region |
|
Novosibirsk region |
|
Omsk region |
|
Tomsk region |
|
Transbaikal region |
|
The Republic of Sakha (Yakutia) |
|
Primorsky Krai |
|
Khabarovsk region |
|
Amur region |
|
Kamchatka Krai |
|
Magadan Region |
|
Sakhalin region |
|
Jewish Autonomous Region |
|
Chukotka Autonomous Okrug |
|
BAIKONUR |
|
Baikonur |
The indicators are calculated based on the 1-VAT report published on the Federal Tax Service website.
Safe share of VAT deductions for the 4th quarter of 2018
The average safe share of VAT deductions for the 4th quarter of 2018 is 86.9%
Region |
Share of deductions, % |
CENTRAL FEDERAL DISTRICT |
|
Belgorod region |
|
Bryansk region |
|
Vladimir region |
|
Voronezh region |
|
Ivanovo region |
|
Kaluga region |
|
Kostroma region |
|
Kursk region |
|
Lipetsk region |
|
Moscow region |
|
Oryol Region |
|
Ryazan Oblast |
|
Smolensk region |
|
Tambov Region |
|
Tver region |
|
Tula region |
|
Yaroslavl region |
|
Moscow city |
|
NORTHWEST FEDERAL DISTRICT |
|
Republic of Karelia |
|
Komi Republic |
|
Arhangelsk region |
|
Vologda Region |
|
Kaliningrad region |
|
Leningrad region |
|
Murmansk region |
|
Novgorod region |
|
Pskov region |
|
city of St. Petersburg |
|
Nenets Autonomous Okrug |
|
NORTH CAUCASIAN FEDERAL DISTRICT |
|
The Republic of Dagestan |
|
The Republic of Ingushetia |
|
Kabardino-Balkarian Republic |
|
Karachay-Cherkess Republic |
|
Republic of North Ossetia - Alania |
|
Chechen Republic |
|
Stavropol region |
|
SOUTHERN FEDERAL DISTRICT |
|
Republic of Adygea |
|
Republic of Kalmykia |
|
Republic of Crimea |
|
Krasnodar region |
|
Astrakhan region |
|
Volgograd region |
|
Rostov region |
|
city of Sevastopol |
|
VOLGA FEDERAL DISTRICT |
|
Republic of Bashkortostan |
|
Mari El Republic |
|
The Republic of Mordovia |
|
Republic of Tatarstan |
|
Udmurt republic |
|
Chuvash Republic |
|
Kirov region |
|
Nizhny Novgorod Region |
|
Orenburg region |
|
Penza region |
|
Perm region |
|
Samara Region |
|
Saratov region |
|
Ulyanovsk region |
|
URAL FEDERAL DISTRICT |
|
Kurgan region |
|
Sverdlovsk region |
|
Tyumen region |
|
Chelyabinsk region |
|
Khanty-Mansi Autonomous Okrug - Yugra |
|
Yamalo-Nenets Autonomous Okrug |
|
SIBERIAN FEDERAL DISTRICT |
|
Altai Republic |
|
The Republic of Buryatia |
|
Tyva Republic |
|
The Republic of Khakassia |
|
Altai region |
|
Krasnoyarsk region |
|
Irkutsk region |
|
Kemerovo region |
|
Novosibirsk region |
|
Omsk region |
|
Tomsk region |
|
Transbaikal region |
|
FAR EASTERN FEDERAL DISTRICT |
|
The Republic of Sakha (Yakutia) |
|
Primorsky Krai |
|
Khabarovsk region |
|
Amur region |
|
Kamchatka Krai |
|
Magadan Region |
|
Sakhalin region |
|
Jewish Autonomous Region |
|
Chukotka Autonomous Okrug |
|
BAIKONUR |
|
Baikonur |
Indicators are calculated based on the 1-VAT report, published on the Federal Tax Service website. The safe share is calculated for transactions that are subject to VAT at rates of 10 and 18 percent, excluding tax amounts and deductions for transactions with a zero rate.
To calculate the share of VAT deductions, you need to divide all deductions for the tax period by the entire accrued tax and multiply by 100 percent. Responsibility for excess deductions is not provided for by law, however, tax authorities will be interested in the activities of the taxpayer if the share of VAT deductions is equal to or exceeds 89 percent of the amount of accrued VAT. In this case, the organization may become a candidate for an on-site tax audit.
VAT deductions reduce the amount of tax payable to the budget (Article 171, paragraph 1 of Article 173 of the Tax Code of the Russian Federation). Only VAT taxpayers who do not apply for an exemption from this tax have the right to deductions. It should be borne in mind that if the share of deductions for the last four quarters turns out to be equal to 89 percent of the amount of accrued tax or more, it is better to defer part of the deductions to the next quarter. After all, this is a reason for an on-site tax audit (clause 3 of Appendix No. 2 to Order of the Federal Tax Service of the Russian Federation dated May 30, 2007 No. MM-3-06/333@). Moreover, the deduction of “input” VAT can now be claimed within 3 years after goods are accepted for registration (clause 1.1 of Article 172 of the Tax Code of the Russian Federation). Note that sometimes in practice tax authorities ask the taxpayer to explain the reasons for the high share of VAT tax deductions. If such reasons are objective in nature, then there is a possibility that the provision of appropriate explanations can reduce the risk of including the taxpayer in the plan of on-site tax audits. In order to calculate the share of VAT deductions, you need to divide all deductions for the tax period by the entire accrued tax and multiply by 100 percent.
Let's give an example. Let’s say that an organization’s accrued VAT amounted to 3,500,000 rubles. VAT deductions for this period were provided in the amount of 3,150,000 rubles. The share of deductions will be 90 percent (3,150,000 rubles / 3,500,000 rubles x 100 percent). Since the figure turned out to be higher than the standard of 89 percent provided by the tax authorities, there is a possibility that the organization will be included in the on-site inspection plan.
Every company or individual entrepreneur has a well-founded desire to reduce the amount of taxes transferred to the budget. To do this, it is not at all necessary to select illegal tax evasion schemes, because the state has already developed and successfully applied in practice a system of tax deductions.
Value added tax is rightfully one of the most complex and significant budget payments required for business entities in Russia.
This tax belongs to the category of indirect federal taxes, that is, it is not paid directly by the payer.
The object of VAT taxation is the sale of goods, works or services produced in our country.
Value added tax rates are provided at 0%, 10% and 18% depending on the category of transactions performed.
Entrepreneurs operating under the general taxation regime are allowed reduce the amount of tax to be transferred through the use of tax deductions for VAT.
The value added tax deduction represents the amount of “input” VAT claimed by the supplier.
You can take advantage of the opportunity to reduce tax only if you comply with following conditions:
Tax deductions for VAT can be divided into: two groups, such as general deductions and special ones.
Go to category general deductions include all major business transactions accompanied by the allocation of VAT: sales of goods, works, services, both for a fee and free of charge, movement of goods across the customs borders of the country.
TO special deductions include all operations that are not included in the general group. These include deductions related to the return of goods, changes in delivery conditions, transfer of advance payments and other similar deductions.
To be able to apply tax deductions for VAT, the conditions specified above must be met at the same time.
The first requirement for obtaining a deduction from “input” VAT is participation of acquired values or works in taxable activities. To a greater extent, this applies to companies and entrepreneurs who combine several tax regimes in connection with conducting different types of activities.
Often in practice, situations arise when a product was initially purchased for use in activities subject to VAT, but in fact is used for completely different purposes that are not subject to this tax. In this case, the company must restore the amount of tax to be transferred to the budget. The restoration process is an increase in the amount of tax payable by reversing the accounting entry for VAT deduction.
Tax law establishes a requirement for applying a value added tax deduction in the form mandatory acceptance for accounting of the received goods or services.
It is possible to reflect the acquisition of material assets in accounting only if there is primary documentation drawn up in accordance with all legal requirements. This procedure is established by the Federal Law “On Accounting” No. 402-FZ.
If, during an audit, tax authorities identify violations in the procedure for registering the “primary tax return” and the absence of mandatory details, the application of a VAT deduction may be considered unlawful. In this case, the company must assess additional tax and pay a fine.
Many disputes arise about the use of which accounting accounts allows the taxpayer to take advantage of the deduction. Mostly, disputes arise when accepting fixed assets for accounting.
Taxpayers believe that reflecting fixed assets on account 08 “Investment in non-current assets” allows for a tax deduction. However, tax authorities take a diametrically opposite position.
Application of a VAT tax deduction is possible only if there is an invoice drawn up in accordance with all the rules. It is this document that provides tax authorities with information about value added tax for a specific transaction.
Starting from 2015, VAT payers must submit the document to the inspectorate. This register allows Federal Tax Service employees to compare the data of counterparties and, if necessary, conduct counter checks.
According to regulatory requirements, it must contain mandatory details determined by tax law. However, nothing prohibits the taxpayer, if necessary, from adding to the document other information necessary for the quality organization of the accounting system.
As for the signature on the invoice, it must certainly be done by hand. The use of a facsimile signature on such a primary accounting document is not allowed on the basis of Letter of the Ministry of Finance No. 03-07-09/49478 dated August 27, 2015.
Tax law obliges the taxpayer to issue upon receipt of an advance payment. Accordingly, the counterparty has the right to record a deduction based on this document. But this solution is voluntary.
The taxpayer can also deduct VAT upon delivery of goods and receipt of the main document confirming the transaction. If the taxpayer nevertheless reflects an invoice for the advance payment, upon receipt of the document for the supply of goods and the repeated reflection of the VAT amount, the deduction for the advance payment must be restored.
If we talk about the regulatory framework that determines the implementation of transactions involving value added tax, then the most important document that allows organizing the accounting system is, of course, the Tax Code. Information on VAT in this document can be found in Chapter 21.
In addition to the main document regulating activities with VAT, there are many letters and resolutions detailing specific cases from practical life.
The use of tax deductions for taxpayers is characterized by the presence of certain features associated with specific situations arising in economic life.
VAT payers, in accordance with tax law, have the opportunity to apply a tax deduction based on the data of one invoice in parts within three years. This rule applies to all transactions with the exception of transactions with intangible assets and equipment for installation. Write-offs cannot be made in parts, however, a tax deduction can be applied within three years in any period.
If the company has decided to accept VAT deductions in installments, the accountant should enter the invoice data in the purchase ledger several times.
In the process of carrying out activities, a situation may arise when an invoice is transferred to the counterparty late. The position of the tax authorities is this: value added tax can be deducted if the company has received a correctly executed invoice. This requirement is one of the main conditions for applying the VAT deduction.
However, the Ministry of Finance is of the opinion that the eligibility of the deduction depends on whether the invoice is received before or after the filing of the tax return. If the receipt of the document falls within the deadline for submitting the tax report to the inspectorate, such a deduction can be taken into account.
The tax deduction system allows companies to significantly reduce the cost of paying taxes. However, providing VAT deductions in large amounts may interest tax authorities and have extremely negative consequences for the organization. In most cases, the threshold for the permissible safe share of deductions is set at 89%
.
The figure of 89% is quite general, as it is established for each region based on the level of economic development and a group of factors.
If a taxpayer analyzes possible VAT deductions and determines that the safety threshold has been significantly exceeded, he has the right, established by the Tax Code, to carry forward the deduction to any period within three years.
In order to calculate the safe share of VAT deductions, you must use the formula:
Share of VAT deductions = VAT deductible / Accrued VAT * 100%
As already mentioned, each region sets its own safe share of deductions. As an example, we give some values of this indicator taking into account the territorial location.
What does the high share of VAT deductions indicate? First of all, the tax burden on business is quite low.
If such a situation is identified during the taxation of domestic companies, tax authorities have the right to demand clarification from taxpayers. In the worst case scenario, an investigation may be carried out against the organization.
In order to minimize all suspicions on the part of the tax control authorities, the company's management should provide comprehensive explanations to the tax return already submitted to the inspection in writing. And the sooner this is done, the better.
An explanatory note for tax authorities should contain maximum information and logical justification for the need to deduct VAT in such a significant amount.
To confirm the good faith of the VAT payer, it would not be superfluous to add to the explanatory note copies of documents that will reveal the reason for the high rate of VAT tax deductions in the organization.
Of course, a fine cannot be imposed on the organization for the poor quality of the explanatory note. However, the lack of proper explanations from the taxpayer may lead to a total audit of the company’s activities in the field of VAT payment.
Additional information on VAT deductions is in the video.
To avoid falling under the control of inspectors, make sure that the share of deductions in the VAT return does not exceed the maximum amount. For each region, the fiscal service quarterly calculates a safe tax deduction for VAT in 2019. This information is published in open sources - on government websites.
If the taxpayer's safe deductions for VAT in 2019 when declaring exceeded the maximum deduction for VAT 2019 established by the fiscal authorities, then you should prepare for a call to a commission or an audit.
To avoid this, calculate the percentage of VAT deductions yourself in 2019 (in each quarter) and compare with the maximum share of VAT deductions established by the fiscal authorities in 2019 in your region. How to calculate the safe percentage of VAT deductions?
To determine a safe VAT deduction in 2019, take data from declarations for the last four quarters. Sum up the total values of accrued VAT and deductions from all declarations. How to calculate the share of VAT deductions further? Divide the total value of deductions by the amount of the entire accrued tax and multiply by 100%.
How to determine the share of VAT deductions - the formula will provide invaluable help. So, let's find out how to calculate the share of VAT deductions using the formula.
Formula for calculating the safe share of VAT deductions:
DVnds = (BB1 + BB2 + BB3 + BB4) / (Nnds1 + Nnds2 + Nnds3 + Nnds4) × 100%,
DVNDs - the share of VAT deduction in the 1st quarter of 2018 (for example, let’s take the tax period - the 2nd quarter of 2019);
BB1, BB2, BB3, BB4 - tax deduction for VAT in 2019 for the 1st quarter, in 2018 - for the 2nd, 3rd and 4th quarters;
Don't know your rights?
Nnds1, Nnds2, Nnds3, Nnds4 - accrued VAT for the 1st quarter of 2019, for the 2nd, 3rd and 4th quarters of 2018.
When it’s time to submit a declaration for the following periods, how to calculate the safe share of VAT deductions using this formula? Example - how to calculate the share of VAT deduction in the 3rd quarter of 2019? Take the total values of deductions and accrued tax from the declarations for the first two quarters of 2019 and the last two quarters of 2018.
VAT deduction coefficients in 2019 for the 1st quarter by region:
Region | 1st quarter 2019,% |
Belgorod region | 89,3 |
Bryansk region | 87,8 |
Vladimir region | 85,2 |
Voronezh region | 92,9 |
Ivanovo region | 92,6 |
Kaluga region | 88,2 |
Kostroma region | 85,4 |
Kursk region | 91,3 |
Lipetsk region | 92,8 |
Moscow region | 90,4 |
Oryol Region | 94,5 |
Ryazan Oblast | 84,9 |
Smolensk region | 94,2 |
Tambov Region | 95,4 |
Tver region | 88,6 |
Tula region | 92,7 |
Yaroslavl region | 87,2 |
Moscow city | 88,4 |
Republic of Karelia | 83,5 |
Komi Republic | 78,6 |
Arhangelsk region | 82,1 |
Vologda Region | 88,1 |
Kaliningrad region | 62,9 |
Leningrad region | 81,7 |
Murmansk region | 81,2 |
Novgorod region | 89,9 |
Pskov region | 87,2 |
city of St. Petersburg | 90,1 |
Nenets Autonomous Okrug | 121,1 |
The Republic of Dagestan | 85,9 |
The Republic of Ingushetia | 95,9 |
Kabardino-Balkarian Republic | 93,3 |
Karachay-Cherkess Republic | 91,8 |
Republic of North Ossetia - Alania | 86,9 |
Chechen Republic | 100,7 |
Stavropol region | 88,8 |
Republic of Adygea | 85,7 |
Republic of Kalmykia | 81,9 |
Republic of Crimea | 87,7 |
Krasnodar region | 90,0 |
Astrakhan region | 62,7 |
Volgograd region | 86,4 |
Rostov region | 91,9 |
city of Sevastopol | 82,0 |
Republic of Bashkortostan | 88,2 |
Mari El Republic | 90,2 |
The Republic of Mordovia | 90,1 |
Republic of Tatarstan | 87,9 |
Udmurt republic | 81,1 |
Chuvash Republic | 83,6 |
Kirov region | 86,7 |
Nizhny Novgorod Region | 88,4 |
Orenburg region | 70,1 |
Penza region | 90,9 |
Perm region | 79,2 |
Samara Region | 84,4 |
Saratov region | 84,9 |
Ulyanovsk region | 91,9 |
Kurgan region | 87,0 |
Sverdlovsk region | 88,2 |
Tyumen region | 83,5 |
Chelyabinsk region | 88,4 |
Khanty-Mansi Autonomous Okrug - Yugra | 58,5 |
Yamalo-Nenets Autonomous Okrug | 69,7 |
Altai Republic | 90,1 |
Tyva Republic | 76,6 |
The Republic of Khakassia | 89,7 |
Altai region | 90,5 |
Transbaikal region | 84,4 |
Krasnoyarsk region | 76,5 |
Irkutsk region | 77,5 |
Kemerovo region | 83,7 |
Novosibirsk region | 89,5 |
Omsk region | 84,0 |
Tomsk region | 75,6 |
The Republic of Buryatia | 88,9 |
The Republic of Sakha (Yakutia) | 86,1 |
Primorsky Krai | 95,6 |
Khabarovsk region | 89,6 |
Amur region | 116,4 |
Kamchatka Krai | 90,1 |
Magadan Region | 98,6 |
Sakhalin region | 103,1 |
Jewish Autonomous Region | 96,1 |
Chukotka Autonomous Okrug | 105,7 |
Baikonur | 57,9 |
When selecting taxpayers for commission consideration, tax officials pay attention to those with a low tax burden. According to the letter of the Federal Tax Service of Russia dated July 17, 2013 No. AS-4-2/12722, one of the signs of a suspiciously low tax burden is a value above 89%, defined as the safe limit for VAT deductions.
However, by letter of the Ministry of Finance dated March 21, 2017 No. ED-4-15/5183, the above-mentioned fiscal order was canceled. But tax authorities can use a formula to check whether your share of VAT deductions exceeds the safety percentage of 89. If so, then they will more carefully look for other signs of tax minimization.
To reduce all risks, before submitting a return, the taxpayer should both calculate the safe VAT deduction and compare it with the regional limit and 89%.
If a taxpayer’s tax deductions for VAT in 2019 in relation to the accrued tax for the reporting period exceeded the established maximum share of VAT deductions in 2019, then this is not evidence that there was non-payment of taxes.
However, if tax deductions for VAT in 2019 (in the declaration) turn out to be, in the opinion of the fiscal authorities, excessive, then the tax office will receive a request for clarification. How do they calculate the share of VAT deduction? In the same way as the example was shown - how to calculate the share of VAT deduction using the formula.
If you believe that VAT deductible has been calculated correctly, then you must justify this. Here are several options for explaining why tax deductions for VAT in 2019, in relation to the accrued tax, exceeded the rate of deductions for VAT established by the fiscal authorities in 2019:
The taxpayer should use the recommendation on how to calculate the share of VAT deductions. The resulting value should be compared with the new safe share of VAT deductions in 2019 for the region where the taxpayer operates. If, according to the formula for a safe deduction for VAT, an excess is obtained, then explanations should be prepared.