When can cross-checking happen to you?
Tax authorities carrying out fiscal control at a given entrepreneur have the right to demand that his contractors inspect documents concerning mutual transactions. This action is called cross-checking. How can it be carried out? When can such a visit by the tax authorities be expected?
Why is cross-checking performed?
The tax authority performing the tax inspection or tax proceedings has the right to cross-check the taxpayer's documents. Such action is aimed at verifying the correctness and reliability of data held by each of the parties to a given transaction. The point is to check whether what results from the documentation of the controlled taxpayer is reflected in the documents at the disposal of its contractors. In this way, the existence of abuses in the course of trade is controlled.
Cross-checking is the most legal activity - it is allowed by Art. 274c par. 1 of the Tax Code:
Art. 274c. par. 1.
“The tax authority, in connection with the conducted tax proceedings or tax inspection, may require the taxpayer's business partners to present documents within the scope of the taxpayer's control in order to verify their correctness and reliability. These activities are recorded in a protocol. "
How is cross-checking performed?
Officials do not need specific authorization to carry out cross-checks.
Cross-checking may only take place during an audit or tax proceeding. It is not allowed during verification activities regarding, for example, verification of the validity of VAT refund.
Cross-checking may apply to any counterparty that conducts business activity. Importantly, they don't have to be neighborhood companies. Pursuant to the regulations, if the place of residence, seat or place of business of the inspected counterparty is outside the area of operation of the body conducting the inspection, cross-checks may be performed by another authority (locally competent for the counterparty).
The entrepreneur will learn about the upcoming cross-check from the summons, which will contain information about what the owner of the company is to share and how - in person, by proxy, by mail. At the end of the audit, the tax authority should prepare the appropriate protocol.
What will officials cross-check?
Cross-checking officers have the right to access all documents related to the scope of activities carried out at the taxpayer's premises. Importantly, within the meaning of tax law, a document is an act expressing certain content by means of a letter, official or private, recorded on a specific material or electronic data carrier (in accordance with the judgment of the Supreme Administrative Court of 28 April 2011, file ref. II FSK 2151/09) .
What documents will be cross-checked depends on the opinion of the officials dealing with the case. Their scope is determined individually, taking into account the subject of control or tax proceedings conducted against the taxpayer.