Company tax audit: find the risks before the tax inspection does

Two meanings of the term

In the Tax Code, a tax audit is an inspection carried out by the tax authority: it covers whether taxes for a period were calculated and paid correctly, with notice given at least 30 calendar days in advance (Article 140). This page is about something else — an independent review of taxes by an auditor before the inspectors arrive, so that errors can be found and corrected by the company itself.

Formats

• a full review of all taxes for the period;
• an express review of key risks;
• a review of a single tax — for example, VAT before a refund claim.

Why do it before the tax authority

If an amended return is filed before the payment deadline, no liability applies; if after the deadline but before the tax authority detects the error, liability is waived provided the tax and penalty interest are paid (Article 82 of the Tax Code).

What is reviewed

• Completeness of the tax base recognised for each tax
• Validity of VAT credits and availability of supporting documents
• Correct application of rates and incentives
• Non-deductible expenses and how they are recorded
• Transactions with interrelated persons — the criteria for interrelation are set by Articles 37–38 of the Tax Code
• Consistency of accounting data with the returns filed

What you receive

A report listing the risks identified, an estimate of possible additional assessments for each, and recommendations: what to fix immediately, what can be closed with an amended return, and where the company's position is defensible and should be supported with documents.

When it is especially useful

• Before a scheduled tax inspection
• After a change of chief accountant or tax adviser
• When entering new lines of business or starting to export
• Before a sale of the business — tax risks always affect the price