On March 18, 2008 the National Organization for Financial Accounting and Reporting Standards held the Round Table “Convergence of accounting and tax reporting. The event was hosted by the Higher School of Economics. On March 18, 2008 the National Organization for Financial Accounting and Reporting Standards held the Round Table “Convergence of accounting and tax reporting. The event was hosted by the Higher School of Economics. Igor Suharev, the main speaker at the event, presented a comprehensive classification of distinctions in the principles of accounting and tax reporting. Having noted, Suharev noted that these inconsistencies can be considered as the main impediment to convergence process of the two reporting practices, he raised a number of key issues in relation to the area under discussion. Particularly, he argued that:1) Financial reporting presents reliable information only in the case when the figures presented in it are unbiased. Yet, financial information stated in a tax report is knowingly biased due to the fact that tax is a non-repayable payment to the state budget, being an outflow of economic resources from the taxpayer, which is calculated by him itself. 2) Financial reporting is based on the prudence concept. The prudence concept in taxation can be interpreted by a tax payer into intention to minimize the taxation base and, therefore, the amount of tax payable.3) According to constitutional concept of tax determinacy, all tax rules should be defined in Tax Legislation. In case of applying financial information presented in financial statements in the process of tax calculation, taxation falls into the category, which is subject to regulating by accounting standards.4) Adequate formalization of tax rules and principles has a direct impact on effectiveness of the taxation system. Deep formalization of the financial reporting rules usually leads to unfair presentation. Substance over form is a major principle employed in financial reporting in order to provide fairness of financial statements. 5) Fair taxation is positively correlated with entity’s economic success. Only analysis of all numbers in the financial statements as a whole can give a fair picture of an entity’s financial success. Tax calculations are based on individual financial figures that are considered separately whereas only aggregate financial indicators can illustrate the economic success. 6) Taxes are calculated in accordance with tax legislation. Financial position and financial performance of an entity are determined by financial statements prepared in accordance with IFRS. Accounting under Russian PBUs is not designed to deal with either of the tasks mentioned above. Is any third task existing that should be achieved by it?The second speaker at the event was Evgenia Kalinina, the director of the Methodology Department of the auditing firm “ZBA”. Evgenia Kalinina presented an alternative view to Igor Suharev’s presentation. Particularly, she mentioned that:1) The statement that Russian companies intend to minimize the tax base in order to decrease the amount of tax payable is not justified. Nowadays, different tax schemes designed to avoid heavy taxation are being replaced by tax planning and by other risk aversion measures. 2) The determinacy of taxation, rather than effectiveness of it depends on how deep is the formalization of the tax accounting rules. The correctness of tax calculations depends on the comprehensiveness and clearness of tax rules stated in the Tax Code.3) Financial statements are analyzed in accordance with aggregate financial indicators. According to tax legislation tax calculations are based on individual figures that are considered separately. This inconsistency is the major issue, which makes taxation practice unfair and inadequate. 4) Accounting under IFRS is implemented by the way of transformation of numbers obtained in accordance with the Russian Accounting Standards. Therefore, the quality of financial statements under IFRS can be inferior to the quality of the financial statements under Russian PBUs. Thus, it is not evident that accounting in accordance with Russian PBUs should be cancelled.5) The vector of convergence of accounting and tax reporting should be defined as following: Russian PBUs should be coverged with IFRS and at the same time tax reporting should follow Russian PBUs. 6) There are two approaches to achieve the convergence of accounting and tax reporting. Firstly, adoption of the concept that adequate accounting rules provide fairness in tax reporting; secondly, leaving out references to accounting rules (specifically, in tax calculations). The dilemma of convergence of Russian accounting and taxation reporting raised an active discussion between the Round Table participants, which, in turn, demonstrates the importance of this issue within the professional community nowadays. As a final point, it was suggested that this subject requires further analysis by the representatives of the state organizations and other professionals and experts.