Loss of tax documents before the retention period expires

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Each of the entrepreneurs may encounter an incidental event (force majeure vis maior), e.g. irretrievable loss of carefully collected tax documentation in a flood or fire. The situation seems hopeless and irreversible. However, the tax law provided solutions in this respect as well. This article presents the issues of how to deal with this type of emergency.

Taxpayer documentation

Joke. 86 in connection with Art. 70 § 1 of the Tax Ordinance indicates that every entrepreneur should keep the documentation until the expiry of the limitation period for the obligation it concerns. Generally, the tax liability becomes non-due after 5 years from the end of the calendar year in which the tax payment deadline expired. In practice, this period is even 7 years.

Entrepreneurs should bear in mind that individual documents may relate to settlements for various types of taxes, therefore the limitation periods may be different. Then the tax liability with the longest expiration (legal validity) period should determine the period of keeping the documentation.

Good to know!

The basic 5-year period for keeping documentation may be extended due to the situations specified in Art. 70 § 2-8 and article. 70a of the Tax Code, i.e. by suspending it or even terminating it.

Information to the tax office

If the entrepreneur's documentation is destroyed as a result of some event, first of all steps should be taken to restore it completely.

However, before this happens, it is worth informing the tax office about the situation. In the event of a possible inspection, the tax authority will know that the deficiencies in the tax records do not result from the taxpayer's bad motives.

Elements of the notification of loss of documents to the tax office

1. Date and place of the letter.

2. Taxpayer's data.

3. Data of the tax office.

4. Indication of the legal basis: Art. 86 of the Tax Code and in the case of payers of art. 23 of the same act.

5. Description of the facts with an indication of what type of documents were lost and for what period;

6. Arguments confirmed by evidence, e.g. a copy of a certificate from the Police in the case of the theft of files or a letter from the State Fire Service in the event of burning, etc.

7. Signature of the taxpayer or his representative (+ power of attorney)

Request to postpone the submission of the declaration

Loss of documentation may cause many difficulties when drawing up the declaration, if the lost documents related to the current accounting period. In this case, pursuant to Art. 48 § 1 of the Tax Ordinance, the entrepreneur may submit an application for deferment of the deadline for submitting the settlement. Importantly, the application should be submitted before the deadline for submitting the declaration.

Elements of the application for deferment of the declaration:

1. Date and place of the letter.

2. Taxpayer's data.

3. Data of the tax office.

4. Indication of the legal basis: Art. 48 of the Tax Code.

5. Specifying which declaration is meant and proposing a convenient date for submitting the declaration.

6. Arguments confirmed by evidence, e.g. a copy of a certificate from the Police in the event of the theft of files or a letter from the State Fire Service in the event of burning, etc.

7. Signature of the taxpayer or his representative (+ power of attorney).

What benefits should be sought in submitting an application for deferment of the declaration? First of all, in the case of postponing the submission of the declaration, the tax payment deadline is also postponed.

Important!

In the event of a deferred payment, late payment will result in interest being charged from the day on which the deferred deadline expired until the date of tax payment!

What's next?

The entrepreneur, regardless of whether he decides to inform the tax office and file a request to defer the submission of the declaration, should immediately apply to his contractors for issuing duplicate invoices and bills. In addition, the taxpayer may ask the bank to issue a statement of bank statements to determine income and expenses. What steps should be taken largely depends on the nature of the economic activity of the entrepreneur.