Tax Audit: Company Rights and How to Act

Types of tax audits under the Tax Code

• desk audit: based on tax returns and tax authority data; entering the premises, inspection, demanding documents and seizure are prohibited, except in an audit of a VAT refund (Article 138);
• field audit: by order, a check of specific obligations, no longer than 10 days (Article 139);
• tax audit: notice at least 30 calendar days in advance (Article 140);
• transfer pricing audit (Article 137).
• Businesses with an "AAA" sustainability rating (except state enterprises and companies with a state share of 50% or more) are not audited, except in audits related to criminal cases (Article 137).

Key deadlines

• documents requested: within 5 days; if you cannot meet this, give written notice on the day after receiving the demand (Article 146);
• objections to a tax audit report: within 10 days of receiving the report (Article 156);
• complaint against a decision: within one month of the day you learned that your rights were violated (Article 232).

What happens at the start of an audit

An audit begins with the presentation of documents: the decision to conduct it and the inspectors' credentials. The company is entitled to review them and record the details; this is not a sign of distrust but normal practice.

From that moment the company is obliged to provide access to documents for the period under audit. At the same time, it has the right to receive demands in writing and to know exactly what is being requested and on what grounds.

• reviewing the decision to conduct the audit
• recording who the inspectors are
• determining the period and taxes under audit
• providing a room for the inspectors to work
• appointing a person responsible for communication

The company's rights

The organisation has the right to know the grounds for the audit, to receive written demands, to give explanations, to review the results and to file objections. These are not formalities but tools worth using.

The right to legal assistance is especially important: the company may engage representatives to support communication with the inspectors. Experience shows that a specialist's involvement changes both the tone of communication and the quality of the final wording.

The company's obligations

The main obligation is to provide access to documents and present them on demand. Refusal or evasion does not protect the company; it creates additional grounds for claims.

The second obligation is not to obstruct the prescribed procedures. The right strategy is not resistance but organising the process: written demands, handover against an inventory list, agreed explanations.

• providing access to documents
• presenting documents on demand
• giving explanations
• assisting with the prescribed procedures
• keeping documents for the period under audit safe

Document exchange with the inspectorate

The golden rule is to record everything. Documents are handed over against an inventory list with an acknowledgement of receipt, demands are accepted in writing, and explanations are given in writing.

This approach protects against the typical dispute over a document that was allegedly never provided. In addition, written demands reveal the logic of the audit and make it possible to prepare a position on problem transactions in advance.

Dealing with the results

At the end of the audit the results are documented; the company reviews them and may express disagreement. Objections are prepared in the prescribed manner and within the set deadlines: missing the procedure removes the opportunity to dispute further.

The quality of objections is determined not by emotions but by documents. Every argument must be backed by specific evidence, otherwise it does not work.

It also helps to prepare staff in advance. Inspectors may obtain explanations not only from management but also from ordinary employees, who often answer questions loosely out of a wish to be helpful. An imprecise description of how a process actually works ends up in the record and is later used as an argument. A simple briefing, telling staff to answer only within their own area and to refer everything else to the responsible person, removes a large share of these risks without any obstruction of the audit.

• reviewing the audit results
• analysing the grounds for each claim
• gathering additional evidence
• preparing written objections
• taking part in the review of the materials
• assessing the prospects of an appeal

How to prepare in advance

The most effective preparation happens before the audit. An internal diagnostic review reveals gaps while they can still be closed: the counterparty is reachable and the documents can be recovered.

The second element is an internal procedure: who communicates with the inspectors, who hands over documents, who approves explanations. Without it, employees give contradictory answers, and that works against the company.

It is also useful to record the course of the audit itself. Dates of demands, deadlines for submitting documents, the content of requests and the answers given should be kept in a single log. Such a log not only disciplines the process but also becomes the basis for later objections: it shows what the company submitted and when, and which questions it answered. Reconstructing this picture after the fact from employees' memories is practically impossible, and its absence weakens the company's position on appeal.

Support from Leader Audit

We can step in at any stage: before the audit with a risk review, during it with support of communication, and afterwards with preparing objections and assessing the prospects of an appeal.

Experience in audits gives us an understanding of the logic of tax control. Our task is not to argue for the sake of arguing, but to bring the company's position to a state supported by documents.

• pre-audit risk review
• internal procedure for communication with inspectors
• support during the audit
• preparing explanations and objections
• assessing the prospects of an appeal