For many entrepreneurs, a tax audit associated with a catastrophe – in most cases this attitude is caused by a lack of knowledge and experience. Indeed, in the peculiarities of tax legislation it is rather difficult to understand if there is no special knowledge in this sphere, practical skills of working with fiscal authorities and experience. In addition, the regular introduction of changes to the Tax Code and regulatory legal acts in the field of taxation requires their constant monitoring. To ensure a comfortable existence and business development, it is necessary to have the subtleties of legal regulation, law enforcement practice and regularly monitor their changes. Sooner or later, the owners and heads of business structures come to the fact that a specialist should deal with tax issues and accompanying tax audits. The law firm SLS Group offers a lawyer whose duties include not only consulting, developing optimal tax options, but also legal support for tax inspections and appealing their results if necessary.
The main types of tax audits
Tax inspections are conducted by employees of the State Fiscal Service of Ukraine (SFS of Ukraine) in order to monitor compliance with tax legislation. The essence of such inspections is the comparison of available data with the object of research, which in this case is a variety of tax, accounting and other documentation. Based on the results of the audit, a certificate or act (in case of violations) is drawn up.
Tax audits can be divided into several types, more about which – below.
A document audit is an inspection, the subject of which is the timeliness, reliability, completeness of the calculation and payment of all taxes and duties provided for by the Tax Code of Ukraine, as well as compliance with currency and other legislation, control over compliance with which is assigned to the supervisory bodies, compliance by the employer with legislation on the conclusion of an employment contract, registration of labor relations with employees and which is carried out on the basis of tax declarations, financial, statistical and other accounting, tax and accounting registers, primary documents and other grounds specified in the Tax Code of Ukraine.
Ukrainian legislation provides for such subspecies of the document audit and the specifics of their conduct:
- documentary scheduled inspection, which is carried out in accordance with the schedule of inspections;
- a documentary unscheduled audit that is not provided for in the work plan of the supervisory authority and is conducted if there are such grounds as obtaining information about violations by the taxpayer of tax, currency or any other legislation that relates to the scope of control of the body conducting the audit;
- document field audit is an audit, which is held at the location of the taxpayer or the location of the property with respect to which such audit is carried out;
- document remote audit is an audit, which is carried out at the premises of the control body;
- unscheduled document field electronic audit, is a subset of inspections, relevant for the subjects of micro, small and medium-sized businesses.
Ex post review
Ex post review is a form of tax audit, which is carried out at the place where the taxpayer actually performs activities, the location of economic or other objects of ownership of such a payer. Such a review is carried out by the supervisory body for compliance with the legislation on the regulation of cash circulation, the procedure for the implementation of tax transactions by taxpayers, the conduct of cash transactions, the availability of licenses, certificates, including the production and turnover of excisable goods, the employer’s compliance with legislation on the conclusion of an employment contract, relations with employees (hired persons).
Ex post review is carried out without warning of the taxpayer on the basis of the decision of the head of the supervisory authority issued by the order, a copy of which have to be given to the taxpayer before the beginning of such an audit.
The grounds for conducting ex post review are usually:
- the results of inspections of other taxpayers, for which facts have been revealed that indicate that the counterparty may have violated legislation on the production and turnover of excisable goods, the payment by the taxpayer of settlement transactions, the conduct of cash transactions, the availability of patents, licenses and other documents controlled by the controlling bodies;
- the information received from the state authorities, which indicates the possible violations of the legislation by the taxpayer, control over which is assigned to the controlling bodies, in particular, settlement operations, cash transactions, the availability of patents, licenses and other documents subject to control;
- a written request from the consumer, a violation by the taxpayer of the established procedure for conducting settlement transactions, cash transactions, patenting or licensing;
- the fact that the business entity fails to file obligatory reports on the use of registrars of settlement transactions, settlement books and books of accounting transactions, submitting them with zero indicators;
- information on violation of the requirements of legislation in the production, registration, storage and transportation of alcohol, alcoholic beverages and tobacco products, and targeted use of alcohol by taxpayers;
- identification of violations during the previous audit and the need to monitor their removal by the taxpayer;
- information on the employment of hired persons without proper registration of labor relations and the payment by employers of income in the form of wages without paying taxes to the budget, as well as the exercise by an individual of entrepreneurial activity without state registration.
Office audit is carried out in the premises of the supervisory authority solely on the basis of the data specified in the tax declarations of the taxpayer and the data of the electronic administration of the value-added tax, as well as data from the unified register of excise invoices and data from the electronic system of Administration of sales of fuel.
This type of inspection is conducted by officials of the supervisory authority without any special decision of the head or direction for conducting it.
The subject of an office audit can also be the timeliness of filing tax returns and the timeliness of registration of tax invoices, excise bills or corrections to them in the relevant state registers, as well as the timeliness of payment of the agreed amount of the tax liability, but solely on the basis of data stored in relevant information bases.
Tax audit: what to do
Unfortunately, in the Ukrainian realities, there is a practice of abuse of power by the controlling bodies in conducting inspections, implementing them contrary to the procedure established by law. Therefore, we remind that the tax employees have certain powers and rights, violations of which can become grounds for appealing their actions in court and recognizing the results of the audit as invalid.
One of the ways to counteract the illegal activities of the state fiscal service in the process of conducting inspections is the possibility for the taxpayer to provide its objections to a certificate or an act on the results of an audit, as well as the right to appeal a tax-communication decision in an administrative and judicial manner.
In order not to miss the submission of an objection to the inspection report and to issue it properly, we recommend that you contact the specialists of the law firm “SLS Group” immediately after receiving notification of the scheduled audit, because the deadline for appeal is a critical factor leading to the impossibility of appealing the actions of the supervisory authority. Our lawyers will promptly help to identify and eliminate shortcomings, to prepare the necessary documentation and reporting. If the tax audit has already begun, our lawyer will control the process of its conduct and will not allow violation of the rights and interests of the client.
In addition, representatives of enterprises should remember that the legislation provides for an exhaustive list of documents that must be presented by officials of the supervisory authority for admission to the site during document audit and post ex inspections:
- document which verify inspection;
- a copy of the order to conduct the inspection;
- the official certificate of the official aimed at conducting the audit.
Many entrepreneurs are convinced that disputes with the tax are meaningless. But, we believe that this is not so and ready to convince you of this! Despite the qualifications and experience of tax officials, some of them often abuse the situation, knowingly violate the rules, and also make certain mistakes. In order to appeal the decision of the tax authorities and win the case in court, you need the help of a lawyer. The team of experienced specialists of “SLS Group” will study the situation in detail, provide sufficient evidence of the wrongfulness of tax officials and justify their position according to the law. They will also help prepare the company for the audit and provide its legal support. The client does not need to spend his time and energy on studying legislation, enter into disputes – law firm “SLS Group” takes care of everything!