Support during field and desk tax audits

What is happening

A decision to carry out a field audit covering three years arrives, and within the first week comes a request for hundreds of documents on a short deadline. Accounts start exporting everything, while nobody has decided who will answer questions about particular counterparties.

A desk audit of a VAT return is in progress: the tax office wants the discrepancies explained and has invited the director to a meeting. What is said and written at this stage decides whether the matter ends with explanations or turns into an additional assessment.

Inspectors summon current and former employees for interview and turn up to inspect the office or warehouse. People do not know what they may decline to discuss, which documents the inspectors may take, or how to record breaches of procedure.

What the law says

• A desk audit is carried out at the tax office on the basis of the return filed, with no separate decision; a field audit is ordered by a decision of the head of the tax office and as a rule lasts up to two months, which may be extended (Articles 88 and 89 of the Tax Code).
• A request for documents during an audit must generally be answered within 10 working days; where that is impossible, the tax office is notified in writing of the reasons and of the date by which the documents will be provided (Article 93 of the Tax Code).
• Explanations in a desk audit are due within five working days (Article 88 of the Tax Code). Interviews, inspections and seizures follow the procedure laid down in the Tax Code and are recorded in minutes.
• A witness may refuse to give evidence against themselves, their spouse or close relatives, and may read the minutes and add comments (Article 90 of the Tax Code). A well-prepared witness does not have to guess what the inspector wants to hear.
• A field audit ends with a report, and the company has one month from receiving it to file written objections (Article 100 of the Tax Code). Everything said and provided during the audit then carries through to the objections and to court.
• Breaches of procedure by the inspectors are worth recording as they happen: on appeal they affect how the evidence is weighed, and material breaches can be a ground for setting the decision aside in their own right.

What we do

• We carry out a preliminary review, identifying the periods, transactions and counterparties most likely to attract questions and checking the paperwork behind them in advance.
• We set up a process for handling requests: who receives them, who gathers documents, who signs off the reply, and how deadlines and documents supplied are logged.
• We draft replies to requests, written explanations and schedules of documents, and where needed a notice extending the time for production.
• We prepare employees for interviews, explaining their rights and the likely topics, and where this is permitted we accompany them to the tax office.
• We attend inspections and seizures, check the grounds and the completeness of the minutes, and enter our comments.
• We represent the company at meetings with the tax office and assess whether it makes sense to correct its tax position before the audit ends.
• We keep a chronology of the audit and, by the time the report arrives, have the position and evidence ready for objections.

What we will need from you

• The decision ordering a field audit, or details of the return that is subject to a desk audit.
• All requests, summonses and minutes received, together with the replies already sent to the tax office.
• Contracts, primary documents and correspondence on the transactions in question.
• A list of employees who have been or may be called for interview, with a note of their role in the transactions.
• The accounting policy and tax ledgers for the taxes within the scope of the audit.