Appealing the results of the tax audit
The appeal of the results of the tax audit is the service of the tax consultant of the law firm AGTL Kharkiv, Kyiv, Odessa.
A tax audit is a comprehensive measure in which the tax inspectorate checks whether the taxpayer, fee payer and/or tax agent is complying with the tax and collection legislation.
At the moment, there are several types of tax audits in Ukraine.
Types of tax audits, grounds for their conduct
The tax authorities have the right to conduct chamber, documentary (planned or unscheduled; exit or non-exit) and actual checks.
Chamber check – check, which is carried out in the premises of the tax authority solely on the basis of data noted in the tax returns (calculations) of the taxpayer.
All tax reporting is subject to scrutiny in a continuous manner. This audit checks the correctness of tax calculations, compares the indicators reflected in the reports to identify possible errors, and other documents or information provided by the taxpayer or available to the tax authority can be checked.
The taxpayer’s consent to the camera inspection and his presence during the inspection is not necessary.
Documentary verification is a check, the subject of which is:
- timeliness, reliability, completeness of accrual and payment of all taxes and fees provided by tax legislation
- Compliance with currency and other legislation, which is subject to the tax authorities to monitor compliance;
- compliance with the law regarding the conclusion of an employment contract, the registration of employment relations with employees;
The information of tax returns (calculations), financial, statistical and other statements, registers of tax and accounting, primary documents of accounting and tax accounting and related to the accrual and payment of taxes and fees is subject to documentary verification; compliance with the requirements of the legislation, which is subject to the tax authorities to monitor compliance; documents and tax information obtained by the tax authority, including the results of inspections of other taxpayers.
Documentary scheduled inspection is carried out in accordance with the schedule of inspections.
Documentary unscheduled inspection is not provided in terms of the work of the state tax authority and is carried out in the presence of at least one of the circumstances, the list of which is defined by the Tax Code.
Documentary check – check, which is carried out on the location of the taxpayer or the location of the object of ownership, against which such inspection is carried out.
Documentary non-exit check – check, which is carried out in the premises of the tax service.
Appealing the results of the tax audit is possible for all types of “documenters.”
The actual inspection is carried out at the place of actual implementation of the taxpayer’s activities, the location of economic or other objects of property of such payer.
The actual audit is carried out by the tax authority:
- Regarding compliance with the legislation on the regulation of cash circulation, the way taxpayers conduct settlement transactions, conduct cash transactions;
- the availability of licenses, patents, certificates, including the production and trafficking of excise goods;
- compliance with the law on the conclusion of an employment contract, the registration of employment relations with employees (employees).
The actual check is carried out without the warning of the taxpayer or other persons.
The actual check is carried out on the basis of the decision of the head of the tax authority, issued by the order, a copy of which is handed to the taxpayer or his representative, under the receipt before the start of such an inspection.
The basis for the actual inspection is:
- Other taxpayer audits have revealed evidence of possible violations of the taxpayer’s legislation on the production and trafficking of excise goods, the taxpayer’s settlement of transactions, cash transactions, the availability of patents, licenses and other documents, which are monitored by the tax authorities, and there is a need to verify such facts;
- in accordance with the law, information has been obtained from state or local governments, which indicates possible violations of the legislation by the taxpayer, which is supervised by the public tax authorities, in particular, regarding the implementation of payments by taxpayers, cash transactions, the availability of patents, licenses and other documents, which are monitored by the public tax authorities, the production and turnover of excise goods;
- written appeals of the buyer (consumer) issued in accordance with the Act, on violation of the established order of settlement transactions, cash transactions, patenting or licensing by the taxpayer;
- failure to submit a business entity within the statutory period of mandatory reporting on the use of registrars of settlement operations, settlement books and books of settlement transactions, presenting them with zero indicators;
- Obtaining in accordance with the law information on violation of the requirements of the law in the production, accounting, storage and transportation of alcohol, alcoholic beverages and tobacco products and the purposeful use of alcohol by taxpayers, as well as the implementation of functions defined by legislation in the production and trafficking of alcohol, alcoholic beverages and tobacco products;
- Identification of the results of the previous audit of violations of the law on the regulation of cash circulation, the procedure of taxpayers’ settlement transactions, cash transactions, the availability of licenses, patents, certificates, including the production and trafficking of excise goods, the employer’s compliance with the law on employment contract, the registration of employment relations with employees (employees);
- in the case of information on the use of wage-earners without proper employment relations and payment of income by employers in the form of wages without paying taxes to the budget, as well as the exercise of business by an individual without state registration.
Price checks in controlled transactions
Also in the tax law there is an additional type of tax audit, which is conducted according to its own rules – price checks in controlled transactions, committed by interdependent or equated persons. For more information on this type of checks, see a special section of our website.
Stages and general rules for appealing the results of the tax audit
Strictly speaking, the term appeal against the results of tax audits usually refers to three mandatory stages of protection of the interests of the taxpayer:
- appealing the tax audit act to the tax authority itself;
- appealing the tax audit decision to a higher tax authority;
- appeal to the Administrative Court.
However, in our experience, the appeal is effective only when, in the first stages of the audit, it was associated with the competent support of its course and the taxpayer consistently defended their interests not only at the stage of the decision, but also earlier – at the stage of the tax audit and tax control measures. Objections, complaints and correspondence with the tax authority at each stage of the tax audit, in the end, is the key to the successful protection of interests.
Appealing the results of the tax audit, in particular, the act of exit tax audit and appealing the act of chamber tax audit at the pre-trial settlement stage have their procedural nuances. It is also important to understand that breach of the due date and appeal procedure may mean a refusal for the taxpayer to restore his violated rights even when he was right on the merits of the issue.
Objectively, that should not be disparaging the procedure of pre-trial appeal of decisions of tax authorities – in most cases, the requirement to recover arrears will be put on display after the consideration of the complaint in a higher tax authority, i.e. at this point the money will actually be withdrawn from the company’s circulation. This is an extremely important and painful moment for any company also because the payment or non-payment of this requirement is connected with the decision to join the police check and initiate a criminal case.
Features of the accompaniment and appeal of the results of the exit tax audit
Any exit tax audit carries significant risks for the taxpayer. There are almost no “inconclusive” exit tax audits, when the taxpayer is not charged with any claims. The tax authority has in its arsenal a large set of measures aimed at identifying arrears in the taxpayer.
The audit takes place in stages, each of them must be analyzed and, if necessary, the actions of the tax authority at each stage should be appealed in order to effectively protect the taxpayer.
It is worth noting that the decision to prosecute for the commission of a tax offence or refusal to prosecute, made by the head of the tax authority, can be appealed only until the moment of such decision comes into force. After the decision on prosecution comes into force, provided that the taxpayer has not appealed against it, it is also possible to appeal, but it is necessary to apply to a higher tax authority.
The appeal of the results of the tax audit, in particular our visiting specialists can be carried out both in the form of advice on the current actions of the tax authority, the compilation of key documents (objections to the act of tax audit, appeal and application to the court), and in the form of a personal presence of a tax lawyer in the office of your company to effectively protect your interests directly during the tax authority’s control procedures.
Features of escort and appeal of the results of the tax audit -camera
As a rule, the camera check taxpayers attach much less importance than the field, considering them a simpler exercise. Often this opinion is not entirely justified. Recent trends in tax legislation are increasingly expanding the rights of inspectors to carry out routine chamber tax audits, bringing them closer to depth and thoroughness with exit checks. The main reason for appealing decisions made on chamber checks is traditionally the refusal to deduct and reimburse VAT.
The main activities during the chamber tax audit, during which, in our experience, clients especially need the support of a qualified tax lawyer, as well as the stages and timing of their implementation can be organized.
As a rule, chamber checks, which do not contain the risks of denial of tax deductions, risks of additional charges and fines, take place, bypassing all the above activities. If you are faced with one or more of the above activities, it is likely that a camera check of the filed declaration may be associated with tax losses for you. In this case, it is important not to miss the moment to effectively protect your interests.
Our services and list of necessary documents
We offer our customers the following services:
- assessment and appeal of illegal actions, demands and decisions of tax authorities taken during tax control measures (in particular, in the situation of claiming redundant documents, illegal documents and appointment of examinations, interrogation of witnesses, inspections of premises conducted outside the legal procedure);
- Assessing the legality of the actions, requirements and decisions of the tax authority, developing a line of protection for the taxpayer, based on the identified tax risks;
- appealing the act of exit and chamber tax audit and participation in its consideration by the tax inspectorate on behalf of the taxpayer;
- preparation and provision to a higher tax authority of an appeal and a routine complaint against the decision of the local tax office;
- preparing a position to appeal against the actions, omissions and decisions of the tax authority in the arbitration court.
Our lawyers and lawyers will help to appeal the results of the tax audit, the process of judicial or administrative appeal of decisions of tax authorities as effectively as possible, thereby reducing the need for further appeal to the court and reducing the risks of criminal proceedings. Effective resolution of disagreements with tax authorities in the pre-trial order will save you not only money, but also time and nerves. You can sign up for a consultation with our Tax Practice specialists by contacting them at any time you like.
What do you need? Appealing the results of the tax audit
For an effective and rapid analysis of the course of the tax audit, we ask you to provide prior to the consultation or during the course of the audit, all documents made during the inspection by the tax authority, including the decision on the appointment of the audit, the requirement to provide documents, the certificate of completion of the tax audit, the decision on the appointment (additional) measures of tax control, the decision to suspend/extend the tax audit, the act of tax audit, as well as all procedural documents sent to the tax authority from the beginning of the inspection The analysis of these materials is crucial for appealing the course and results of the audit.
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