Tax audit - everything you need to know!
Tax audit is something that every entrepreneur can await. Tax audit is aimed at examining how and whether the company fulfills its obligations under the tax law - it is therefore about the appropriate method of calculating and paying taxes. In the text, we describe how to prepare for a tax audit!
The date of commencement of the tax audit
A tax audit must always be preceded by a notification from tax institutions, which is to be received from 7 to 30 days before the beginning of the audit activities. If the tax inspection is to be initiated before the lapse of 7 days from the date of receipt of the notification, then the consent of the inspected entity becomes necessary. If the tax inspection is not started within 30 days from the date of receipt of the notification, the tax office is obliged to set a new date.
Tax audit - preparations
A notice of a fiscal audit should contain information about the scope and type of taxes to be checked. Knowing this, the business owner must make good use of the time before the tax audit - e.g. for completing and verifying documentation in a given area. The period before the audit by the tax authorities is also a time to correct potential errors - if any are found during the collection of documentation.
Before starting a tax audit, the entrepreneur has a chance to correct cost and purchase invoices, incorrect entries in the KPiR or tax declarations. The latter can be modified with the corrective declaration sent together with the justification for specific changes. The taxpayer should also remember to pay any tax arrears - together with any late payment interest.
Business contacts with foreign partners usually mean documentation in a foreign language. Such entrepreneurs must know that during a tax inspection, there may be a need to translate documents into Polish - the inspectors may request it and they do it regularly. It should be borne in mind that the translation must be made by an expert, because only then will the tax office accept it. The translation costs are borne by the taxpayer.
If the company operates with the use of an electronic financial and accounting system, it may be subject to the so-called e-tax audit, i.e. downloading the necessary data directly from the aforementioned system. The data is then checked by specialized IT applications. The company using the system should inform the controllers in writing about the type of software used and the file formats supported by them (this is about the possibility of converting and exporting information). You also need to check the system configuration, especially the method and sources of data entry into it - this is a chance to correct previously undetected errors.
Auditors from tax authorities should only be provided with documents relating to the subject of an ongoing fiscal audit. The taxpayer may refuse to show other documentation. If there is any doubt as to whether the auditors are right to request the submission of the indicated documents, they must be asked to explain their connection with the tax audit carried out.
How to inform employees about the inspection?
If the entrepreneur receives information about the tax inspection planned by the office, he must pass it on to all subordinates who have financial and accounting matters in their duties. It must be remembered that the auditors not only review the documentation, but can also ask questions about the area under investigation and demand explanations.
The obligation to provide explanations in matters covered by tax audits - in the scope of activities or activities performed - rests on:
- persons authorized to represent the controlled entity or persons managing its affairs,
- persons interacting with the controlled.
This is due to Art. 287 § 4 of the Tax Ordinance.
Explaining and answering a question, of course, cannot be like an interview. The entrepreneur does not have to prove the proper settlement of costs - he should explain the procedure as usual.
What if the entrepreneur is absent during the inspection?
There are cases when an illness or a key business meeting prevent the entrepreneur from participating in a tax inspection. In this case, it is possible to indicate a natural person authorized to represent the taxpayer during the tax audit - it must be done in writing. The notification should be sent to the appropriate head of the tax office in the field of PIT and CIT taxation, as well as to the head of the mayor or city president.
Such a representative - unless the authorization contains other instructions - is by default authorized to:
- receipt of the notification of the upcoming tax inspection,
- consent to the commencement of the inspection before 7 days from the date of delivery of the notification,
- receipt of an authorization to conduct a fiscal audit,
- completion of fiscal control,
- submit explanations and objections to the inspection report and all inspection activities.
Another possibility is to grant a power of attorney - the person who receives it has more powers. Has the right to act on behalf of and for the entrepreneur granting the power of attorney in writing or orally. The original of the written power of attorney (or a duly certified copy thereof) should be submitted to the fiscal control documentation, and the oral ones should be included in the protocol.
What are the entrepreneur's obligations during the inspection?
During the fiscal audit, the entrepreneur is obliged to:
- provide access to the land and to buildings, premises and other premises,
- provide files, books and other documents related to the subject of control,
- issue files, books and documents for the duration of the inspection (when the inspectors have reasonable suspicions that they are unreliable, or when the taxpayer does not provide the inspectors with conditions enabling the inspection activities related to the inspection of documentation),
- show the property that is subject to inspection and enable its inspection,
- make a physical inventory at the request of the inspectors,
- enable - free of charge - filming, photographing, making sound recordings and recording the facts using other information carriers, if the film, photo, recording or information recorded on another medium may constitute evidence or contribute to the preservation of evidence in the case,
- present, at the request of the inspectors, a translation into Polish of documentation drawn up in a foreign language,
- provide explanations regarding the subject of the inspection within the prescribed period,
- provide the inspector with working conditions and, if possible, provide an independent room and place for storing documents.
Tax audit - entrepreneur's rights
During the fiscal control, the entrepreneur has the right to:
- participation in control activities,
- participation in the taking of evidence (the place and date of taking evidence from witnesses and experts' opinions must be notified at least 3 days before the date, and the inspection evidence no later than immediately before taking these actions),
- appointment of an attorney or representative,
- requirements from the inspectors to comply with health and safety regulations in force in the inspected unit,
- submitting reservations and explanations to the fiscal control protocol,
- claiming civil compensation for damage suffered as a result of carrying out inspection activities in violation of the law in the field of business activity control,
- object to the commencement and conduct of fiscal control activities in breach of the provisions of the Entrepreneurs' Law.
The tax inspection should be announced with an appropriate notification, and the inspectors are required to present a professional ID.
Tax audit may not be carried out to the extent that has already been checked and a final decision has been issued. You have to be careful whether the inspectors do not exceed the scope of the inspection - they have no right to examine a different tax or settlement period than the one specified in the notification.